Industrial manslaughter legislation – is there a need and will it boost WHS compliance?

In 2017, Queensland became the second state in Australia (following the ACT in 2004) to enact industrial manslaughter (IM) legislation.

The laws – which are an extension of the existing Work Health & Safety Act 2011 (QLD) – criminally illegalise any action or omission of action, that inadvertently causes death in the workplace.

If found guilty of industrial manslaughter, a person conducting a business or undertaking (PCBU) may be liable for fines of up to $10 million; and a senior officer could face up to 20 years in prison.

IM provisions for other states were recommended in the 2018 Boland Review and have been subject to numerous parliamentary discussions over the years; but, as yet, they have not been passed and remain politically controversial.

While Labor has declared its intention to introduce a similar charge in NSW and Victoria, critics say the penalties are not the answer and may lead to adverse outcomes.

Ahead of Informa’s Safety in Action Conference, we explore why the laws exist and the arguments for and against them.

Low rates of WHS compliance, high rates of fatality

According to the State Insurance Regulatory Authority, around 35 workers died on NSW construction sites between 2015-17; and in 2017, Safe Work NSW issued 1258 breach notices in construction sites – collecting $265,000 worth of on-the-spot fines – as part of a major crackdown.

Marie Boland who led the 2018 review of WHS legislation and recommended the IM provisions told us, “The report highlights areas in which employers, workers and regulators all agreed that new approaches were needed.

“These include the management of risks to psychological health in the workplace, and approaches to regulating supply chains and networks where there are overlapping duties and responsibilities.

“I recommended this new offence to address the increasing community concerns that there should be a separate industrial manslaughter offence where there is a gross deviation from a reasonable standard of care that leads to a workplace death.

“I also considered it was necessary to address the limitations of the criminal law when dealing with breaches of WHS duties.

“It’s important to note that this industrial manslaughter recommendation is one of a package of recommendations which are intended to be considered together – the others are increasing penalties and implementing sentencing guidelines.

“It’s also important to remember that I recommended Safe Work Australia work with legal experts on this package of recommendations to ensure that there is an opportunity to consider them carefully”.

More harm than good?

However, not everyone is convinced that the provisions will adequately prevent WHS breaches.

Clyde & Co Health and Safety Partner, Alena Titterton – who will be conducting an industrial manslaughter workshop at the Safety in Action Conference – said, “While it is clearly the case that community expectations have driven the IM reforms, I’m not sure that these are positive developments for safety.

“A natural consequence of the IM provisions is the involvement of multiple lawyers to protect the potentially conflicting interests of workers, supervisors, managers, officers and corporations.

Ms. Titterton is concerned that this will make incident response for fatalities much more complex.

“When there are multiple lawyers for multiple parties, there is typically less flow of information as each affected party prioritises the protection of their specific legal interests.  That can be to the detriment of safety because it limits the immediate sharing of information that may prevent the next catastrophic incident.

“There are very real and tragic consequences of workplace fatalities.  I don’t think families would want to see less information sharing to prevent incidents as a consequence of swinging the pendulum too far in the direction of penalties based on consequence, rather than the proactive risk-based model that is the basis of the regulatory framework as a whole.

“What is critically needed is more effective and consistent enforcement including in relation to penalties and sentencing.”

Out of focus?

Ms. Titterton doesn’t believe scare tactics are the answer and says that the research on deterrence factor effectiveness would support that.

“If people are insufficiently deterred by the idea of 5 years imprisonment, why do we think simply increasing the potential gaol term to 20 years will make a difference?”.

Regardless of whether IM offences gain traction around the country, Ms. Titterton says, “It may be trite, but the very best legal liability strategy when it comes to the IM reforms is simply this: don’t have a fatality.

“One of the things I have learnt in over ten years of investigating serious incidents and fatalities is that there is always a pattern of early warning signs in previous incidents that did not have such dire consequences but that were insufficiently investigated or there was inadequacy in the timeliness of closing-out of issues identified following those previous incidents.

“The industrial manslaughter reforms should act as an impetus for organisations and their officers to resource the effective investigation of serious near miss/near hit high potential incidents in their business and the implementation of controls in those contexts.

“Indeed, these developments further emphasise the importance of strategic critical WHS hazard/risk identification and review by officers in a proactive manner as part of their approach to WHS due diligence.”

An unnecessary distraction?

Nerida Jessup of Herbert Smith Freehills understands the community’s expectations that WHS penalties should reflect the culpability of offenders – and that this is what the introduction of the IM laws is designed to do.

However, she added, “It seems that the political urgency to introduce IM laws may be driven by a perception that recent WHS prosecutorial decisions, and sentencing outcomes haven’t been serious enough.

“At its highest, some have said that WHS Laws have meant that businesses and individuals aren’t being held sufficiently accountable.  To some extent this perception is not surprising – the most serious offences under the WHS Laws – Category 1 offences – are regularly brought before the courts.

“Whenever we look to introduce new laws though, the key question has to be: Is there a need, and will it be effective?

“On the question of need, there are perhaps two ways of looking at the lack of ‘Category 1’ prosecutions. Following any serious workplace incident, there is a well-resourced and detailed investigation into the circumstances leading to it.

“If there are no ‘Category 1’ offences being charged that perhaps means that either the safety regulator has concluded that the corporate or individual conduct investigated is not of that most serious standard, or there is a doubt that any prosecution will be successful.

“In this context, it is not necessarily clear how the introduction of a more serious offence, with much more complex legal elements and factual issues will lead to more serious offences being brought, and in this context we might ask what is the real need for these laws?”

“The second question relates to the impact on worker safety, or effectiveness. Under the existing general duties contained in the WHS Act, employers and managers are required to undertake significant risk management to ensure worker safety so far as they reasonably can.

“IM laws don’t require this. They simply require that a business or person not be reckless as to the safety of workers. Oddly enough then, there is a risk that this debate focusses on introducing laws with a lower standard for compliance (albeit with higher penalties for breach).”

“At their worst, some might say that the IM debate could be little more than a distraction from what duty holders should be doing and are required to do under WHS laws – focussing on the management of risk”.

But, a step in the right direction

Ms. Titteron says, “In my opinion, the IM offences as they have been enacted in Queensland are not a solution fit for purpose and need some serious technical amendment to fit into the broader legislative scheme established by the Model WHS Laws if such offences are ultimately rolled out in the Model WHS Laws across the country.”

But she believes the Boland Review has provided, “A positive roadmap for us to pivot away from some of the technical legal problems in the Queensland IM legislative drafting in terms of the structure of the offences, their qualifiers, the scope of duty holders and individuals to whom the duty is owed as well as putting those offences in a logical place in the context of the whole offences framework within the WHS Act.”

Ms. Titterton also says, “More importantly, the Boland Review demonstrates a nuanced understanding that a package of reforms, taken together, are required to meet the community expectations that led to this latest call for IM offences”.

“I think Ms Boland’s Review points us in the right direction in saying that the IM recommendations need to be read in the context of other recommendations such as prohibiting insurance for penalties, conducting a broad review of penalty levels as well as looking at introducing penalties and sentencing guidelines for Courts.

“Those reforms have the potential to do far more in terms of incentivising prevention and achieving consistently applied significant consequences in terms of penalties imposed when serious incidents occur than IM offences on the statute books in and of themselves.”

Looking ahead, Ms. Titterton says it will be interesting to see if Safe Work Australia takes the UK’s 2016 Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences Definitive Guideline.

“The Guideline provides a step by step process and formula for Courts when it comes to sentencing offenders looking at factors such as culpability, likelihood of harm, potential consequences of harm and then also linking the penalty to the relevant business’ turnover.

“If Safe Work Australia is looking to adopt that type of approach, it will also have an impact on the outcomes in any review of maximum penalties for the various categories of offences under the Model WHS Laws”.

A previous Clyde & Co Report analysed penalties handed down in the UK in the 12 months following the introduction of those guidelines. It found that the UK saw more 1 million pound (and above) penalties than in the previous 20 years combined.

It also found that, with individual penalties against large companies as high as 4 and 5 million pounds (and over), 46 percent of survey respondents believed the introduction of the guideline had a positive impact on their organisation, resulting in greater focus when it comes to the boardroom agenda.

Join the debate and find out what the introduction of IM provisions means for your organisation at Informa’s Safety in Action Conference – to be held in Melbourne on 10-11 September 2019.

Register now to secure your seat.