For background, the Council of Australian Governments (COAG) is still considering the recommendations coming out of Safe Work Australia’s inquiry into the effectiveness of the national model WHS laws by independent expert, Marie Boland (Boland Review).
In brief, the 2018 Boland Review found that the model WHS legal regime was largely operating as intended, but identified a number of areas for improvement.
The final report made 34 recommendations. Of most relevance to directors, these included:
- Creating a new industrial manslaughter offence for instances of ‘gross negligence’ (requiring such a great falling short of the standard of care which a reasonable man would have exercised and which involved such a risk that death or grievous bodily harm would follow that the doing of the act merited criminal punishment); and
- Introducing a prohibition on insurance and other indemnity arrangements for payment of WHS fines to ensure that monetary penalties provide an effective deterrent and are not diluted by D&O insurance.
In the AICD’s submission on the Boland Review, we advocated against both proposals, noting that the introduction of an industrial manslaughter offence is not necessary given existing criminal law offences and the Category 1 offence contained in the Model WHS laws.
However, we agree that should an industrial manslaughter offence be considered, the fault threshold should be that of ‘gross negligence’ (defined above) as proposed by the Boland review.
What is the status of WHS reform in each jurisdiction?
While the objective of the Boland Review was to encourage the harmonisation of WHS regimes between States, Territories and the Commonwealth, several States and Territories already have an industrial manslaughter offence, while others have introduced legislation ahead of COAG’s recommendations on the Boland Review.
We take a closer look at the status of the industrial manslaughter legislation in each of the jurisdictions below.
The ACT was the first jurisdiction to introduce industrial manslaughter as an offence under its Crimes (Industrial Manslaughter) Amendment Act 2003, which commenced in 2004.
Although the ACT’s legislative amendments precede the Boland Review, the industrial manslaughter offence is in line with the final Report’s recommendations, requiring the prosecution to establish that an officer or body corporate was either:
- ‘reckless’ about causing serious harm to an employee; and/or
- ‘negligent’ (being the criminal negligence standard which closely aligns with the definition of ‘gross negligence’ set out above) about causing the death of an employee.
The offence carries a maximum penalty of 20 years imprisonment and $320,000 for officers or $1.6 million for bodies corporate.
The offence of industrial manslaughter has to date never been used to prosecute a director in the ACT.
On 27 November 2019, the Northern Territory Parliament passed the Work Health and Safety Amendment Bill 2019 (Northern Territory Act), introducing a new industrial manslaughter offence to the WHS legal framework.
Quite apart from the Boland Review recommendation, the threshold for establishing liability under the industrial manslaughter offence is ‘negligence’ (again, this is the standard of criminal negligence which broadly aligns to ‘gross negligence’ set out above) or ‘recklessness’.
When it commences, the offence will attribute the harshest maximum penalty for industrial manslaughter of all the jurisdictions, with the potential for a sentence of life imprisonment for officers and a $10.2 million fine for bodies corporate.
The Northern Territory Act is expected to receive royal assent and become effective in the coming months.
The Work Health and Safety Amendment (Review) Bill 2019 (NSW Bill) was also introduced to the NSW Parliament in November last year.
Departing from the Boland Review recommendations, the Bill:
- does not propose the introduction of an industrial manslaughter offence, but clarifies that work-related manslaughter offences may still be prosecuted under the Crimes Act 1900 (NSW), carrying a maximum penalty of 25 years imprisonment; and
- proposes creating a new offence for entering into, or benefitting from, insurance or other indemnities in relation to the payment of WHS penalties – carrying a maximum penalty of $1.25 million fine for officers and a $2.5 million fine for bodies corporate.
The NSW Bill is still awaiting further debate in the upper house when Parliament reconvenes in February 2020.
In the wake of the Dreamworld theme park tragedy that resulted in the deaths of four people, the Queensland government introduced an industrial manslaughter offence in 2017 under the Work Health and Safety and Other Legislation Amendment Act 2017 No.38 (Qld) (Queensland Act).
Again, Queensland’s legislative reform precedes the Boland Review and departs from the final Report’s recommendations. Under the Queensland Act, the industrial manslaughter offence requires a low fault element of ‘negligence’ as to causing the death of a worker and does not include a prohibition on insurance and other indemnities in relation to WHS penalties.
The offence carries a maximum penalty of 20 years imprisonment for an officer and $10 million fine for bodies corporate.
Although the first industrial manslaughter proceedings against a body corporate is currently before the courts, a director is yet to be prosecuted for the offence.
The Work Health and Safety (Industrial Manslaughter) Amendment Bill 2019 (SA Bill) was introduced to the State Parliament in May 2019.
The SA Bill proposed an industrial manslaughter offence where an employer (or an officer of the employer) is in breach of their duty of care and was ‘recklessly indifferent’ as to whether their conduct would create a substantial risk of serious harm, causing the death of a worker. The SA Bill proposed maximum penalties of up to 20 years imprisonment for individuals or a $1 million fine for bodies corporate.
The second reading of the SA Bill was adjourned and there have been no further updates on whether this will be reintroduced for debate.
Industrial manslaughter is not currently an offence in Tasmania, making it the last remaining jurisdiction where there has been no industrial manslaughter offence proposed.
The Workplace Safety Legislation (Workplace Manslaughter and Other Matters) Bill 2019 (Victoria Bill) was passed by the State Parliament on 26 November 2019, introducing a new industrial manslaughter offence.
In keeping with the Boland Review recommendation, the new offence will require a fault element of ‘gross negligence’ on the part of an officer or body corporate where their conduct causes a workplace death, and will carry a maximum penalty of 20 years imprisonment for an individual and a $16.5 million fine for a body corporate.
The Bill is now awaiting royal assent and will become effective in the coming months.
The Work Health and Safety Bill 2019 (WA) (WA Bill) was introduced to the WA Parliament on 27 November 2019.
The WA Bill goes further than the Boland Review recommendations and unlike its counterparts in other States and Territories, proposes two new industrial manslaughter offences:
- a ‘Simple’ offence - where a person fails to comply with a health and safety duty causing the death of a person (requiring a low fault element of ‘negligence’). This carries a maximum penalty of 10 years’ imprisonment and a $2.5 million fine for an officer, as well as a fine of $5 million for a body corporate; and
- a ‘Crime’ offence – where a person has a health and safety duty and engages in conduct, with a knowing disregard, that it is likely to cause the death of an employee. This carries a maximum penalty of 20 years’ imprisonment and a $5 million fine for an individual and $10 million for a body corporate.
The Bill also proposes a prohibition on insurance and indemnity arrangements for WHS liability penalties.
The WA Bill still awaits further debate in the upper house when Parliament reconvenes in February 2020. The AICD is engaging on the WA Bill, with a particular focus on ensuring a threshold of ‘gross negligence’ is incorporated.
What are the impacts for the liability of directors?
The introduction of tougher WHS regimes across the States and Territories, to date, has not been without controversy. As we begin to see the new industrial manslaughter offences being trialled in the courts for the first time in a number of recent owner-operator cases, there is now more than ever increased scrutiny of individual liability of company directors and a risk of significant penalties being imposed in response to failures to comply with WHS duties.
With the remaining suite of legislative reform continuing to evolve as we enter 2020, it is critical that directors and organisation remain vigilant - keeping the health and safety of employees front of mind and prioritising regular, active oversight of WHS matters at the board level.
Moreover, in the absence of a uniform approach across the States and Territories, we remind directors to keep up to date with the different WHS laws in those jurisdictions in which their organisation operates.
We will continue to engage closely on these issues and will keep members updated.
For a refresher on the relevant WHS duties, the AICD’s WHS director tool can be accessed here.
State to State snapshot – status of industrial manslaughter offences