It is time for a rethink on occupational health and safety laws?

No reasonable person disputes the need to have laws which protect workers’ occupational health and safety. That is a given.

As far back as July 2008 the Council of Australian Governments committed to harmonising State and Territory occupational health and safety laws. This means that all States will have uniform workplace safety laws. It was originally proposed that the uniform workplace safety laws would be introduced by 1 January 2012.

However the West Australian and Victorian Liberal Governments have stepped back from a commitment to introduce the new laws by January 2012. The NSW Government is also rumoured to have stepped back from introducing the new laws by January 2012.

There is no doubt that the new workplace safety laws will have a huge impact on business. For example, companies will now be liable for fines of up to $3million for a single breach of a number of the offences created by the new workplace safety laws.

Currently the maximum fine that a corporation will face for a single breach of the Victorian Occupational Health & Safety Act is just over $1million.

The fines currently imposed for breaches of the Occupational Health & Safety Act can be massive.

The Occupational Health & Safety Act does not distinguish between public corporations and private corporations. In the Longford gas explosion, Esso was fined in excess of $1million. For a corporation of that size a $1million fine, given the nature of the breach of the Occupational Health & Safety Act, was obviously appropriate. However private corporations face penalties of the same order.

Responsible business owners, including our manufacturers, already bear the high cost of State and Federal regulatory compliance. Although the community is yet to properly understand its impact, many manufacturers are already apprehensive about the increased cost of production which they may bear as a result of the imposition of the Carbon Tax, as well as the current difficult trading conditions which are worsened by the high Australian dollar.

Responsible manufacturers will have already borne the significant cost in creating a workplace safety culture. Measures such as conducting risk assessments, appointing a health and safety representative, appointing a manager with specific occupational health and safety responsibilities, devising comprehensive policies and procedures to ensure manufacturing processes are safe, engaging occupational health and safety consultants, re-engineering machinery to ensure that it is adequately guarded and adequately supervising employees to ensure that occupational health and safety procedures are complied with are just some measures that manufacturers ought to implement to ensure a safe workplace. However such measures come at a considerable cost.

Even when such measures are in place accidents can happen. Sometimes such accidents are caused by employees breaching safe operating procedures. Even in those circumstances employers remain at risk of huge fines.

Victorian corporations may be rightly concerned if the maximum penalty which can be imposed is to be increased to $3million. At the risk of such a fine, manufacturers, when deciding to continue operating in Victoria or going offshore, may just consider the risk of operating in Victoria is too great to continue. Our manufacturing sector is already under considerable pressure. The impact of manufacturers moving offshore to less regulated countries will leave workers in those workplaces without work, causing damage to them and their families.

The other costs which manufacturers will need to bear as a result of a workplace accident are a possible Sentencing Act claim, where the worker and the worker’s relatives may seek compensation for pain and suffering, in addition to any WorkCover claim made by the employee, as well as a three year increase in WorkCover premiums. Any award of compensation made under the Sentencing Act is not covered by insurance.

The personal consequences to workers involved in serious workplace accidents are significant and often tragic. Many employers are also personally affected by serious injuries to their employees. There is no doubt that creating a positive culture of workplace health and safety is in the interests of both employers and employees.

However it is timely to ask whether the imposition of ever increasing financial penalties is the answer, particularly as such penalties go into consolidated revenue, and are not used to improve the occupational health and safety at the individual workplace. There is little doubt that if a significant financial penalty is to be imposed, employers would rather be compelled to spend that money improving occupational health and safety at their workplace than giving the money to the Government.

For further information please contact Harwood Andrews LawyersOH&S and workplace relations lawyers:

Jim Rutherford
Principal & Accredited Specilist in Workplace Relations Law and Criminal Law
1800 552 018
jrutherford@harwoodandrews.com.au