29 June 2020
In a District Court decision in Brisbane recently, convictions were handed down to the entire board of directors after the death of a worker.
The impact of this decision will be widespread and highlights the obligation for directors to actively manage their workplace health and safety, irrespective of the company size.
During the incident at Brisbane Auto Recycling Pty Ltd, a worker was struck by a forklift in the company’s wrecking yard, and subsequently died from his injuries. The court heard workplace safety procedures were minimal and there had been an absence of any realistic investment in establishing safety systems. The court heard a safety consultant had described the system as, “no more than mildly inconvenient”. There was a reliance on verbal safety instructions and the forklift operator was unlicensed and unskilled.
During court proceedings, it was established that a traffic management plan had not existed for a long period of time. The court heard that as such, the failure to ensure the safety of workers and visitors to the site was regarded as a serious breach. The Court stated, "The defendants had no safety systems in place, in particular there was no traffic management plan”.
Subsequently, the two directors of the Queensland company were convicted and sentenced to ten months’ imprisonment, wholly suspended for 20 months. Their company was convicted of industrial manslaughter and fined $3 million.
The directors were two young men, both married with young children. They had built up a successful business employing eight staff. But it appears a reluctance to invest in safety systems or to seek professional advice played a major part in this tragedy.
Your responsibility as a Director
Safe Work Australia has set down model workplace, health and safety laws, regulations and codes of practice which have been adopted by the majority of states and territories across Australia. Throughout most jurisdictions, workplace health and safety legislation regards a director as an “officer” of the company and as such, you must exercise due diligence to ensure the company complies with its duty and obligations.
In practical terms, due diligence includes taking reasonable steps to:
- Understand and keep up to date with health and safety matters.
- Understand how your business operates, and to identify the risks and hazards.
- Make sure you invest in people, processes and systems to eliminate or minimise these risks.
- Make sure there are processes in place to report and record incidents, hazards, and risks and for you to be able to respond to these in a timely manner.
- Ensure you are complying with any duty or obligation under the relevant state or territory legislation.
- Check and confirm that what you think is happening is happening.
It is critical directors are actively involved in health and safety. Despite having someone responsible for administering your health and safety programs, you must still check and verify that what you are being told is correct. You must “check the checker”.
For many businesses, COVID-19 has shifted the focus to survival and rebuilding. Priorities have changed, and things can be forgotten. But this decision highlights for directors and boards, health and safety cannot be one of these. It must remain top of mind and you must be satisfied that you have done everything required of you under the relevant legislation.
It does not matter what anyone else has done. You, as a Director, have a personal liability. There are risks you could face including criminal prosecution, so you must take personal responsibility and ensure your health and safety practises are adequate and working.
If you have any doubts about your obligations, your role as a director, your liabilities as a director or need help with governance, contact your local Findex office. We have experienced staff throughout the country who can help and guide you.