Company directors and officers beware – Imprisonment for WHS breaches a reality

  • 4 Mar 2019
Key Points: 
  • No company, director, officer or worker can afford not to take their WHS responsibilities seriously
  • Penalties are increasing and are starting to include imprisonment
  • WHS amendments likely to increase penalties further and to ban insurance being offered against penalties
The risk of officers and workers being imprisoned for breaches of WHS legislation has been a possibility for many years but is now becoming a reality.

Within the space of a month two company directors have been sentenced to jail for breaches of WHS legislation in Victoria and Queensland respectively.

In the first case, company owner Ms Maria Jackson was sentenced to 6 months’ jail and fined $10,000 plus costs after pleading guilty to offences relating to recklessly endangering and killing a worker in a forklift incident.

In the second, company director, Gary Lavin was sentenced to 12 months imprisonment and his company was fined $1 million for recklessly contributing to the death of a roofer.

In sentencing Mr Lavin, Judge Cash stated the need “for general deterrence is significant, as is the need to denounce the conduct which involved a quite flagrant disregard for proper safety methods and one which I have concluded was motivated by a desire to improve your and the company’s financial position.”

It was held that the cause of the roofer’s death was the failure to install a safety rail which had been included in the quote for the work but was not installed. If this had been installed it is likely the roofer would not have fallen 5.9 metres to his death. His Honour found that the decision not to install the safety rail was motivated by a desire to maximise profits and was “a base motivation that must be considered inexcusable in the context of modern work health and safety practices.”

These cases continue a trend of imposing significant penalties for reckless conduct offences. Cudal Lime Products Pty Ltd was recently fined $900,000 and its worker $48,000 in NSW and Toll Transport Pty Ltd was fined $1 million in Victoria.

Penalties are also on the rise for the lower level category 2 offences with the NSW Court of Criminal Appeal ruling last year that three penalties imposed by District Court Judge Scotting were inadequate. Fortunately for the PCBU’s involved in those cases the Court decided not to intervene with Judge Scotting’s orders because of significant prejudice caused by the delay in appealing the sentences.

It was noted, however, that the “sentences imposed in the District Court should not be accepted as demonstrating an appropriate range in future cases.”

In three cases decided by the NSW Court of Criminal Appeal in late February 2019 the fines against two PCBU’s were increased from $300,000 to $600,000 and from $75,000 to $375,000 respectively while the third PCBU narrowly avoided an increase in fine from $225,000 to $450,000. This was despite similar delays in bringing the appeals as had occurred last year.

The lessons from these cases are clear: no company, officer or worker can afford to shirk their WHS responsibilities. You cannot afford to cut corners or put profit ahead of safety. The penalties for breaches are increasing significantly – the honeymoon period is definitely over – and imprisonment is a genuine risk.

With the Review of the model Work Health and Safety laws, Final Report, by Marie Boland (former SafeWork SA executive director) having been released in February this year, we can expect some further tightening of these laws to occur.

Ms Boland has recommended:
  • introducing an offence of industrial manslaughter “where there is a gross deviation from a reasonable standard of care that leads to a workplace death.” This offence could be committed by a PCBU and an officer.
  •  an increase in penalty levels and the development of sentencing guidelines.
  •  making it easier for union officials to enter workplaces to assist health and safety representatives without necessarily needing entry permits.
  •  making it an offence to enter into a contract of insurance that covers fines for breaches of WHS legislation.
The Federal Government has provided in-principle support[1] for WHS amendments that could increase maximum fines by more than 90% (from $3 million to $5.7 million) and explicitly ban insurance against penalties.

If you need help understanding or complying with your WHS obligations or need assistance following an incident it is prudent to seek expert help. It is not a journey you should shy away from or take alone.

Sarah Jones, Partner, Hicksons Lawyers (BSc.LLB.Grad Dip Mgt)

Sarah has extensive experience in employment and safety law and advises employers, managers and HR Professionals on drafting and amending employment contracts, human resources policies, breaches of employment contracts, termination of contracts and post-employment obligations.

She also advises on unfair dismissal and general protection disputes, unlawful termination and discrimination claims, and on award obligations.


Awards:
Best Lawyers 2019 Nominee for Occupational Health & Safety Law
10th edition of The Best Lawyers in Australia for Occupational Health & Safety Law

Post by Sarah Jones

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