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Important News concerning new OH&S responsibilities for Directors’

New laws affecting health and safety in work places across Australia will be with us very soon. It is important that directors and senior management of companies are familiar with these laws and what to do to prepare for operational changes.

These changes have already been enacted in Queensland, ACT and NSW with the remaining States and Territories required to finalise implementation by 1 January 2012.

The new laws redefine existing duties owed by a business and introduce new duties on businesses and individuals. The duty of executives/officers of a business to exercise due diligence to ensure compliance is one pertinent example. There are three key changes that every employer must be aware.

Primary Duty

There are two important duties in the new rules about how a business should ensure the health and safety of workers and others that might be put at risk in their work place.

There is a new definition of “worker”. Not only is a worker defined as an employee but also includes contractors, sub-contractors, employees of contractors/sub-contractors, employees of labour hire company/ies, outworkers, work experience, volunteers. It’s very broad.

The duty of care is “as far as reasonably practical”. The High Court of Australia has indicated that in any prosecution for a workplace safety offence, the regulator must identify the measures that should have been taken to prevent the incident. The regulator now has an additional burden to prove that the measures that should be taken have been taken were reasonable practicable.

In the business world, this means taking into account how likely the risk is and the degree of harm that could result and what is known about the risk and ways to eliminate the risk. With all of these considerations in hand, the cost associated with this minimisation, including whether the cost is grossly disproportionate to the risk. Best practice at ensuring compliance and avoiding prosecution are part of your risk assessment process.

Usually common sense is used to work out what is reasonably practicable. A good example is the risk of working at heights. Without fall protection, harnesses, handrails, temporary fencing etc all preventative measures. Where the risk of injury is low proving a measure was reasonable practicable may be more difficult and requires expert evidence. This incurs additional costs.

New Offence

Directors may think there is relief with the removal of the deemed liability provision from the OH&S Act 2000 (NSW), directors and senior management now have a new more onerous obligation to exercise due diligence. This includes developing and maintaining systems to ensure executives are up to date with knowledge of OH&S matters and appropriate recourses for compliance.

Consult and Cooperate

Businesses must consult with employees and the new laws formalise the way in which the consultation take place. There are also new powers for Health and Safety representatives. Importantly when a number of businesses are working together on the one site, for example a construction site, these businesses are required to consult and coordinate activities for all safety matters. Fines of up to $100,000 can be imposed for breached of this provision.

To Summarise

• WHS Act is about increased communication and cooperation to ensure the health and safety of workers.
• There is a new importance for the information flow between executives, the business, the workers and any other workers/employees on site/project.
• The aim is to reduce injury and fatalities in the Australian workplace.

We recommend you undertake an immediate review of existing systems and implement enhancements to ensure compliance. Existing contracts should be reviewed to ensure the consultation process is met. We can assist with introducing consultants who specialise in the area.

Insurance

Unintentional breaches of duties bestowed upon directors and executive of companies can in most instances be insured against. Often the costs associated in defence and attending enquiries is also insurable. Management Liability provides sound protection against these types of actions for directors and senior management, not just for unintentional breaches of the Corporations Act but also OH&S, Employment Practises, Statutory Liability, Pollution Defence plus other benefits.

Please contact your client manager for a quotation or more information about this relatively inexpensive protection for your private assets and business.

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