Episode 4: Changes to WA Work Health & Safety Legislation and How to Prepare

 

In late 2020, EBM delivered a webinar on the proposed updates to WA's Work Health and Safety Legislation with Piet Jarman from Sparke Helmore Lawyers. With these changes to legislation, insurance for WHS penalties will be prohibited in Western Australia.

 

In this podcast we are joined again by Piet Jarman, and also Peter McLachlan, EBMs Chief Operating Officer, and Amanda Tulloch, EBMs National Manager — Injury Management. We revisit this topic and also what businesses can be doing now to prepare for the significant changes expected to the legal framework in WA.

 

 

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In this podcast, we have provided general advice only and not personal advice. In giving this advice, we have not considered your personal circumstances.

 

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EBM recently delivered a webinar on the proposed updates to Work, Health and Safety legislation with Piet Jarman from Sparke Helmore Lawyers. In this podcast, we're joined again by Piet and also Peter McLachlan, EBMs, Chief Operating Officer and Amanda Tulloch, EBMs National Manager for Injury Management as we revisit this topic and also what businesses can be doing now to prepare for the significant changes expected to the legal framework.

 

1:02 

First up, we'll get you to set the scene for today's podcast, please. Can you provide an overview of the current WHS legislation framework?

 

1:14 

Yes, well, I don't want to go too far back but in the 1980s, it was determined that it would be appropriate to have consistency in national work health and safety laws. It took a long while to come to fruition. But finally in around 2012 2013, every state of Australia with the exception of Victoria who legislated, similar workplace legislation, and they called it harmonisation of the legislation. By the way, these days, we don't call it harmonisation. We call it modernization for some reason. But if you want to be entirely up to date with the lingo, and the jargon, it's modernization of the WorkSafe work health and safety legislation. So, Victoria who didn't participate, said they do their own thing. Its modernised work health and safety legislation. It did so on the matter of a month ago. And the effects or the effect of that legislation won't really be in force until sometime next year (2021). My tip is the second quarter of 2021. So the framework to this legislation makes some significant changes. It introduces I guess the most controversy as it introduces the concept and the crime of industrial manslaughter.

 

2:51 

So that's the big one, people will go to jail for causing death or for conduct, which in fact causes death or which is likely to cause death.

 

3:06 

There are cases around Australia, which we'll talk about a bit later where people have been sentenced to terms of imprisonment. Some of the other changes include the imposition of duties on a variety of persons. So the linchpin now the legislation is focused on a PCBU. A person conducting a business or undertaking, not an employer as the previous legislation did, or an occupier of a worksite. It's a person conducting a business and undertaking and that person includes officers of that of that company. So all of these people have duties. And these duties are all concurrent, which means that they exist across multiple companies across people at the same time, and they cannot be transferred. So if you fall within the ambit of lead of the legislation, then you're caught, you're subject to the duties, and you're subject to any penalties that apply. The legislation is risk based. So that means that it's not focused on only situations where an injury occurs. It's focused on reducing the risk of injury and that's a very important feature of this legislation.

 

4:32 

And the enforcement powers were there in the previous legislation, but they've been beefed up considerably in this legislation, most significantly, as well. There's the voiding of insurance arrangements to cover the funds. No longer will you be able to cover by insurance, the fines that are imposed as a result of this legislation.

 

4:59 

There are so many Penalties paid, including a category one offence for reckless conduct.

 

Could you provide an example of what is likely to be considered reckless conduct?

 

Yes, I can. Perhaps a good example might be the actual case of what happened in the multiplex prosecution were in Canberra where Mr. Watts was a crane driver. And he was asked to conduct a lift on soft and uneven ground. And in circumstances where he thought the lift was unsafe, he was a bit unsure about proceeding. He was a casual employee of the subcontractor, and both Multiplex and the subcontractor wanted this lift performed that was holding up proceedings and pressured him notwithstanding his reluctance to proceed to undertake the lift.

 

For fear of losing his employment, he proceeded. And in the course of the lift, the crane fell over and killed a fellow worker who was prosecuted initially with industrial manslaughter. But that charge was then downgraded to reckless conduct. And the court said that he knew of the risks. And even though it took into account that he was pressured to perform the lift, because he was aware he was indifferent or reckless to the consequences. And of course, the consequences of a crime falling over, obviously, the risk of serious injury or death to fellow workers. So that's one example.

 

Any example I think, where there is a significant risk of serious injury, and that risk is recognisable, and not remote will be circumstances in which a court may well decide that conduct is reckless.

 

So what was the penalty in that case that you just refer to in that case.

 

Mr. Watts received 12 months imprisonment.

But the sentence was suspended. So with a good behaviour bond, so he didn't actually go to jail. But if there was a repeat offence within that 12 month period, then he'll serve 12 months. Our understanding is that the definition of health will include both physical and psychological health. This means that risks like stress, fatigue, and bullying are taken into account.

 

7:50 

What types of initiatives can or should businesses have in place to ensure employee well-being and reduce risks in this area? Amanda is that something you can take us through?

 

Sandy, employee system programme is also always beneficial for employers and employees also, gauging with their work, health and safety community, having a committee that's strongly engaged in their objective, workers are often the best point of contact to highlight areas of concern, but also have recommendations to address these areas there is. And I also think another initiative is to look at lessons learned.

 

8:26 

Know where there has been incidents of you know, stress, or fatigue or even workplace bullying? What do we learn from those lessons? This is an opportunity to rectify, but also celebrate any successes we've had as well.

 

Okay, is there anything you want to add?

 

Yes. And I think for me, it's about management practices, as well. It's about not walking past behaviours that you might not have done. So a couple of years ago, and particularly with stress and bullying, not doing something about a problem is going to be much more of a highlight now under this new legislation than it was previously. And I think, you know, that's that hidden for me that the change that's happening here is there's a few hidden little risks. And one of them is by not doing something, you might be just as liable as if you had done something. So I think Amanda has made some really good points there in terms of the sort of loss or potential action that is happening.

 

I think you've got to take a step back as well and change your management practices and make sure that you're, you know, a director and a senior manager needs to make sure that in performance profiles, you know, people are responsible for making sure that the workplace is safe from all of those risks, not just the physical risks paid in previous conversations that we've had the need for due diligence has come up quite a lot. And obviously most businesses need to show it a level of due diligence but in in regard to this new legislation.

 

10:00 

In a few times that the importance of conducting due diligence and being able to show that you've taken action is becoming more and more important.

 

Can you take us through the components of it? How do you see due diligence working in this regard?

 

Yes, well, the legislation specifically sets out the components of due diligence. And they're not strict. In relation to due diligence is to take all reasonable steps in relation to the following. That is, firstly, a knowledge of work health and safety matters.

 

10:32 

Officers must take all reasonable steps to understand the business operations and the hazards and risks associated with the business. They've got to take all reasonable steps to understand the resources, the business has the processes, and to obtain as much information as they can, as they reasonably can. In relation to the hazards, risks, incidents, make sure there's a timely response, make sure there's investigations for near miss incidents, and ensure that that legal compliance is there and very importantly there is an obligation of verification. So there's going to be audits in relation to all of those processes. Like they can be self-ordered, or independent audits or preferably both. That's verification, one's the one for me, and with the benefit of previous conversations with you, that you've always told me about that board that had signed off on the safety systems thought they have a terrific safety system in place, but they've never actually verified that it had been implemented or embedded in the business. And it wasn't.

 

So it's that need to go put the right processes in place, and then check that they're being triggered, and documented, document the processes and document the audit and check about reasonableness. We often get asked what is reasonable because obviously, what's reasonable for a mining company compared to a sole trader, or some of that is obviously different.

 

So what's the definition of reasonableness? Yes, thanks, Amanda. Reasonableness is a concept that's found throughout the legislature, throughout legislation, industrial legislation, tort legislation, tort case law and even criminal law. It's a concept that emerged in the 1930s. And essentially, it's, an ill-defined test, but it goes down to a gut feel of what a reasonable person in that position in that situation would think is appropriate, and to in relation to a duty to do something or not do something.

 

12:42 

With the pending legislative changes, who is now considered an officer and what are the associated obligations?

 

Yes, well, this is an important change in the legislation. So the duties are cast, specifically on officers to exercise due diligence. The definition of officers is taken from the Corporations Act and includes a director or secretary of the corporation. And in that Multiplex case that I referred to earlier, it was interesting to note that the managing director of Multiplex was actually charged in relation to this matter, as was the managing director of the subcontractor. Anybody really, who makes or participates in making a decision that affects the business or part of the business can be deemed an officer.

 

13:30 

And in the Corporations Act, there's a concept of a shadow director, that is somebody who the directors are accustomed to listening to and taking advice from and acting in accordance with their recommendations. Those people can also be deemed as officers of the company and can be subject to these penalties. And also, you've got people like the site managers and the site safety people, all of these people can be considered officers, and can be subject to these penalties, including in prison. And they're given the same waiting if you're compared to if you're a chief executive officer to a supervisor, or the parent is given the same warning.

 

Yes, it's all about knowledge of the risk, the duty to do something about the risk, and how serious the risk is, and the likely consequences of it. And it's that analysis is applied to each of those persons. So I think that sort of supports my concern, doesn't it? You mentioned knowledge of the risk. Yes. And that's all part of that. If you are shown to have known about something and not done anything, yes, that's where your liability might, might fall. Absolutely, absolutely. And even worse, if there's a duty of due diligence put on officers, so even if you don't know about the risk, perhaps you should have and you're under a duty to ensure that you do know about all of the risks associated with your business.

 

15:05 

Hey, in the unfortunate event of a workplace accident where a worker may be certified on for, let's say, 10 days, what actions should employer take? Immediately following that workplace accident? Obviously, the priority is the worker and getting them the medical assistance required and find that family. But what are the steps following that? Yes, well, the injury management side of looking after workers the first priority, and after that, then it's about the internal processes, it's about conducting an investigation into how the injury has occurred, and documenting that investigation. And in relation to that, without plugging lawyers, if those investigations are conducted with or through the auspices of a solicitor, then legal professional privilege can attach to those investigations, so that they cannot be used in subsequent litigation. So if the incident is serious enough, then it's always a good idea to get a lawyer involved up front to protect those investigations. Many organisations have those sorts of processes in place, all of the very large, multinational companies have lawyers on their, on their investigation teams, and they react immediately. So if it's good enough for the multinationals, it's good enough for those companies that aren't quite so multinational.

 

16:50 

A lot of businesses hopefully, you know, have worked with providers and advisors before, and they've probably got a good investigation system in place, following an accident. But now it's different. And your point about privilege is one of the key things, isn't it? Whereas you used to be able to get your safety manager to do an investigation and document the processes and what happened. That's all going to be available under summons, isn't it? Yes. Whereas just to select pick the word privilege, whereas if you use a lawyer, it won't be accessible via a subpoena. And so the information of that put that first investigation will remain secure to the employer. That's exactly right. You've used the term step up in relation to describing this legislation. I think it's pretty good description, every aspect of this legislation is a bit of a step up from the previous legislation in terms of heightened obligations, and responsibilities and duties.

 

I think it's important that you know, the employers also their requirement to notify their WorkSafe in the state or territory, but also contact EBM, your account manager or the injury management team who can assist you with the lodgement of a workers compensation claim and also provide any guidance and assistance in terms of the investigation. I think that's particularly important. If any of our clients have remote work sites, that worksite can contact us and we can help them guide them through the process.

 

18:31 

With these changes, it will become an offence to enter into or offer to enter into an insurance policy or indemnity arrangement for the payment of WH&S files. What should businesses be doing now in preparation for these changes from an insurance perspective?

 

18:48 

Sandy, I think from the insurance perspective, it's the same as a lot of other parts of your insurance programme, we should always be reviewing it, we should always be going through to make sure that level of cover is appropriate that what we're insuring is appropriate. And this is the same we need to go in and we need to look at what your business is and how your policies are going to respond. So I think this is one of those triggers that hopefully a lot of our clients will say right?

 

Can we go through our insurance policies and make sure that we have the most appropriate cover? We don't, we haven't seen all of the changes the wording changes that insurers will be bringing forward. So it is going to be a settling in period. And that's why we need to be really careful that we're entering into a better discussion with our clients in terms of the cover that you have appropriate for your needs.

 

Just with that, Peter, is there any indication that the costumes of these policies will be impacted as well?

 

Obviously, given the nature of these penalties, which you mean legal representation is going to be really important, but that's a really good example Amanda, because on the one hand, the fines are now no longer going to be insured. So you would, you would expect a reduction in the cost. But on the same hand, we expect legal expenses will go up, because there is a lot more to this legislation. And we need to be prepared that there could be a lot more legal activity. So we need to work our way through with the insurers to understand what the pricing implications might be, is my best guess Peter, is that ultimately, not initially, but ultimately, the costs of these policies will increase because there will be significantly more legislation because when the penalties are so significantly increased, and people can go to jail, there'll be far more incentive to fight these charges. And as a result of fighting these charges, more legal costs will be incurred? I have no doubt about that. So I would certainly be if I was in the position of being an employer, be consulted EBM to check that my policies adequately covered that exposure. And so taking that point the first step is making sure that the sublimit on legal expenses is high enough. Absolutely. Whereas in, you know, five years ago, you might not have thought that you would need a significant amount set aside for that. Now, and particularly larger industries might want to be a little bit better protected in that regard.

 

21:25 

Thank you.

 

21:26 

Amanda, can you take us through some of the practical tips employers can be following with regards to safety?

 

Yes, Sandy, as we previously mentioned, through the podcast, it's really important that everyone's aware that work health and safety is everyone's responsibility and we need to encourage and foster a safe culture within the workplace.

 

Act promptly when you become aware of a potential issue, keep appropriate documentation to demonstrate compliance, conduct any required investigations, undertake those inquiries in response to incidents, but also importantly, near misses, and obtain advice and undertake audits.

 

And again, contact EBM if you need any assistance. In this regard, we're here to help you as your risk partner. If you're unsure of anything, or how to start this process, contact your account manager and we'll help guide you through this process. Amanda, you've just made me think of something that we probably haven't mentioned. But near misses is going to be more important, isn't it? Because if an employer has three or four near misses of the same nature, that probably goes to the same live walk past problems that they should have fixed? Exactly. And especially even from a workers comp, point of view as well in terms of common law. If they're aware of something and they haven't fixed it, then that is based on negligence. They're also from the Work Health and Safety Act, and assuming that they didn't undertake what was reasonable person would have done and pay that will go against them, which to me, absolutely. Pick up this focus on work health and safety. In your opinion, do you think the number of workplace inspections by WorkSafe for who, for example, is likely to increase and also how they do their inspections?

 

23:08 

Peter mentioned a step up in describing this legislation. And I, I would agree with that. So the answer short answer is yes. I think WorkSafe will be increasing the depth of their investigations. It was interesting to note in relation to the legislature, this legislation in the ACT that Greg Jones in that Multiplex prosecution conducted a very serious investigation and levied 1237 different charges to various officers arising out of those that investigation and he described that as the way WorkSafe commissioners around Australia should be looking at investigation. So two companies and seven individuals were charged. So I think you can expect that WorkSafe will be conducting very serious and in-depth investigations with a view to multiple charges arising out of one incident. So prior to this legislation, you certainly wouldn't have been expecting that sort of focus.

 

I might just ask, both Pete and Amanda. EBM has a fairly large number of clients who operate in multi jurisdictions so they might have operations in WA, South Australia and New South Wales. If the company's head office, is in WA, but an accident or an incident happens in New South Wales. How will that play out in terms of the legislation and the prosecution I suppose if it went to that.

 

Well, the first point to remember is that the applicable legislation is that where the incident or injury has occurred. So if it occurs in New South Wales, then it will be the New South Wales workers comp legislation and generally speaking, workers comp is actually a little bit different with the state of connection. But it'll be, generally speaking, it'll be the New South Wales legislation that applies.

 

25:11 

I might just jump in there because I think that we can help there. Because what I've got out of this session is that importance for the due diligence and having a lawyer investigate the claim, and being able to take advantage of that privilege. If one of our clients has an accident in New South Wales, we can arrange that lawyer to help and to get that investigation done and certainly paid on a you could refer us to some people. I think that's the sort of thing that we've got to get our head around, isn't it? Yes, you've got to be proactive about that. And so I'd be contacting EBM and making those arrangements. And just to expand on Piet's point there, in terms of workers compensation.

 

25:57 

Each legislation will look at the state of connection when determining which legislature will respond to that injury, it's just important to contact your EBM account manager if you have work that are going to be outside of this day on a temporary arrangement, working inter state for greater than six months, because you may need to get a new policy in that new state or  territory.

 

26:17 

The state of connection legislation provisions are really quite complex, they are difficult for people to understand. And they really do require some expert advice. So always just contact EBM, if you've got any workers going to leave the state or go overseas, our best advice is to contact your account manager and we'll help you make sure you've got the right insurances in place.

 

26:42 

So that we've been through a lot of information this morning. So from this, if our listeners could take away anything from today's podcast, what would be your top considerations for businesses going forward?

 

Well certainly both Amanda and Pete might have more technical points that they might like to raise. But mine is, is fundamentally this is different. And clients need to think differently, act differently, and prepare differently. And I think that's the point I've got out of my research in this and this podcast is we need to be doing things differently. And if we don't, the ramifications are far more significant than they were before. I think it's really important that each business has a plan for near misses, incidents and emergencies have that in place, be proactive and review it regularly. But also I think mental health needs to be a key focus, especially the year we've had this year in 2020, this highlights the importance of making sure everyone is okay.

 

I focus on culture. I think culture is very important in any organisation. So encouraging, fostering that safety culture and being proactive about it, as Amanda said, is, is vital. And the other really significant feature that I'd like to stress is to order, verify and document all your procedures and your investigations. Thank you.

 

28:32 

Special thank you to Pete Jarman from Sparke Helmore Lawyers, and also thank you to my EBM colleagues Peter McLachlan and Amanda Tulloch for joining this conversation. If you are seeking further resources on this subject please take a look at the websites for Safe Work Australia, the Department of Mines Industry Regulation and Safety, and of course Sparke Helmore Lawyers and EBM.

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