Senior workers beware


The Work Health and Safety Act is six months into its operation and personal liability is the emerging issue.

Those within the definition of ‘officer’ are particularly nervous about the ‘officer’s duty’. These people are ‘senior workers’, exposed to significant liability and are vulnerable as they do not generally attract the compliance support provided to officers; and can still end up in jail.

Two issues affect personal WHS liability: the criminal nature of the WHS laws; and that one cannot insure for criminal liability under the WHS Act.

The new laws are unambiguously criminal laws, and breach of a WHS duty may attract a criminal record, potentially stopping the individual from holding directorships and working in certain professions.

Equally, insurance is not available to cover possible criminal penalties where there is any element of “personal fault” in the offence. So, criminal penalties for personal failure under the new WHS laws must be paid out of the duty holders’ personal funds.

In the private sector, the term ‘officers’ has the same meaning as in Section 9 of the Corporations Act. The fact that directors and company secretaries are officers is not difficult to apply. It is more difficult to work out the key category in the section 9 definition namely: “The person who makes or participates in decisions that affect the whole or a substantial part of the company’s business”.

James Hardie; Saffron vs. ASIC

Two boxes must be ticked in order to be an officer. First, does the person make or participate in decisions? The High Court in the recent James Hardie case (Saffron v Australian Securities and Investments Commission [2012] HCA 18) tells us that “the emphasis is on what responsibilities the person undertook, not the job title or the capacities in which the person is thought to act”.

James Hardie also tells us that an officer need only participate in making a decision. Second, if you have made or participated in decisions, those decisions must affect the whole or a substantial part of the company’s business.

If we take the construction business as an example, a company may have five projects, four of which generate 95 per cent of the company’s revenue. This means that the fifth project, which generates only 5 per cent of the revenue, is unlikely to be regarded as a substantial part of the company’s business.

If that is the case, even the manager who makes very significant decisions about the fifth project falls into the grey zone, the senior worker who we say is vulnerable.

Any worker (senior or otherwise) must exercise “reasonable care” in relation to:

  • their own health and safety.
  • ensuring that they do not harm others.
  • complying with reasonable company instructions.
  • co-operation with company policy or procedures.

However, the concept of reasonable care means that senior workers are subject to more onerous WHS obligations than a worker with limited autonomy or control.

When a court is considering a workers’ liability it will ask:

  • what the reasonable person in their position does in the circumstances.
  • the relevant circumstances, including the worker’s experience, position and training.
  • the level of control over a particular person/project/site/activity, including their level of autonomy or whether they act under the instructions of and report directly to a more senior manager.

Clearly, there is scope for new WHS law to demand much from senior workers.

Leave a reply

avatar
100000
  Subscribe to receive comments  
Notify me of
More on HRM

Senior workers beware


The Work Health and Safety Act is six months into its operation and personal liability is the emerging issue.

Those within the definition of ‘officer’ are particularly nervous about the ‘officer’s duty’. These people are ‘senior workers’, exposed to significant liability and are vulnerable as they do not generally attract the compliance support provided to officers; and can still end up in jail.

Two issues affect personal WHS liability: the criminal nature of the WHS laws; and that one cannot insure for criminal liability under the WHS Act.

The new laws are unambiguously criminal laws, and breach of a WHS duty may attract a criminal record, potentially stopping the individual from holding directorships and working in certain professions.

Equally, insurance is not available to cover possible criminal penalties where there is any element of “personal fault” in the offence. So, criminal penalties for personal failure under the new WHS laws must be paid out of the duty holders’ personal funds.

In the private sector, the term ‘officers’ has the same meaning as in Section 9 of the Corporations Act. The fact that directors and company secretaries are officers is not difficult to apply. It is more difficult to work out the key category in the section 9 definition namely: “The person who makes or participates in decisions that affect the whole or a substantial part of the company’s business”.

James Hardie; Saffron vs. ASIC

Two boxes must be ticked in order to be an officer. First, does the person make or participate in decisions? The High Court in the recent James Hardie case (Saffron v Australian Securities and Investments Commission [2012] HCA 18) tells us that “the emphasis is on what responsibilities the person undertook, not the job title or the capacities in which the person is thought to act”.

James Hardie also tells us that an officer need only participate in making a decision. Second, if you have made or participated in decisions, those decisions must affect the whole or a substantial part of the company’s business.

If we take the construction business as an example, a company may have five projects, four of which generate 95 per cent of the company’s revenue. This means that the fifth project, which generates only 5 per cent of the revenue, is unlikely to be regarded as a substantial part of the company’s business.

If that is the case, even the manager who makes very significant decisions about the fifth project falls into the grey zone, the senior worker who we say is vulnerable.

Any worker (senior or otherwise) must exercise “reasonable care” in relation to:

  • their own health and safety.
  • ensuring that they do not harm others.
  • complying with reasonable company instructions.
  • co-operation with company policy or procedures.

However, the concept of reasonable care means that senior workers are subject to more onerous WHS obligations than a worker with limited autonomy or control.

When a court is considering a workers’ liability it will ask:

  • what the reasonable person in their position does in the circumstances.
  • the relevant circumstances, including the worker’s experience, position and training.
  • the level of control over a particular person/project/site/activity, including their level of autonomy or whether they act under the instructions of and report directly to a more senior manager.

Clearly, there is scope for new WHS law to demand much from senior workers.

Leave a reply

avatar
100000
  Subscribe to receive comments  
Notify me of
More on HRM