June 2020

Industrial manslaughter charges arising from a lack of due diligence: why take the risk with safety?

Industrial manslaughter charges, a $3 million fine for the defendant company and suspended prison sentences for the two directors will send a chill down the backs of businesses and boards. So it should.

While industrial manslaughter charges against businesses and directors are unusual in Australia, the outcome of failing to exercise due diligence is not unusual.  It has both a human and financial consequence that can often be so easily avoided. 

The recent Queensland case of R v Brisbane Auto Recycling Pty Ltd & Ors [2020] QDC 113 is another case of an employee being killed at work by a forklift and directors working in the business being reckless to safety.  What sets this case apart from other safety prosecutions is the complete lack of safe work systems and processes to address, in a meaningful way, the hazards and safety risks at work.  Unsurprisingly, industrial manslaughter charges were laid.

The facts

The defendant company was an auto wrecking business. 

In May 2019, a worker on site at the auto wrecking business was struck by a reversing forklift and died eight days later.  The deceased worker was “crushed” between the back of the forklift and a tilt tray on his truck.  The driver of the forklift was unlicensed and not looking when he reversed, only looking back when he hit the deceased worker.  The driver was an inexperienced forklift driver and the company had at no point, made sufficient enquiries into whether the driver held the requisite licence.

An investigation conducted by the Queensland Police and Workplace Health and Safety Queensland found that the company had no written safety procedures, no WorkCover policy and importantly, no traffic management plan, in circumstances, where a number of forklifts operated in close proximity to workers and the public.

The directors of the business, and individual defendants in the criminal proceedings, were 23 and 25 years old respectively.  Their youth was no exemption from their statutory duties of due diligence.  They worked in the business and as leaders, owed important duties to protect the health and safety of the workers.  

The directors were also dishonest and deliberately deflected responsibility, when first questioned about how the incident occurred.  The directors incorrectly named the forklift driver and informed the family, namely the deceased’s daughter, that he had fallen from a truck instead of being struck by the forklift.

The duty of due diligence

Under the Work Health and Safety Act 2011 an officer of a business, like the directors, “must exercise due diligence to ensure that the … business … complies with” it’s duties.  The obligation is serious, with potential fines of up to $115,500 for less serious contraventions and up to $692,500, or five years jail, for reckless disregard for safety.[1]

So, what does due diligence entail?  The legislation says it involves the taking of reasonable steps including:

(a)   to acquire and keep uptodate knowledge of work health and safety matters; and

(b)   to gain an understanding of the nature of the operations of the business or undertaking of the person conducting the business or undertaking and generally of the hazards and risks associated with those operations; and

(c)   to ensure that the person conducting the business or undertaking has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the conduct of the business or undertaking; and

(d)   to ensure that the person conducting the business or undertaking has appropriate processes for receiving and considering information regarding incidents, hazards and risks and responding in a timely way to that information; and

(e)   to ensure that the person conducting the business or undertaking has, and implements, processes for complying with any duty or obligation of the person conducting the business or undertaking under this Act; and

(f)   to verify the provision and use of the resources and processes referred to in paragraphs (c)-(e).

The sentencing outcome

The risk of death from a forklift is obvious and well-known.  The Court found the lack of any safety systems simply remarkable; the absence of a traffic management plan was inexcusable.  It was reckless for the directors to not have a safe work system and to not foster a safe workplace culture. As the Court found, “the inaction by the defendants was due to expedience for commercial gain or complacency, or both, the moral culpability of each is high”.

In fact, the Court was of the view that the implementation of measures to ensure safety at the workplace would have been relatively simple and inexpensive.  The installation of signage, plastic bollards and marked exclusion zones on site, along with adequate supervision and a traffic management plan, would have gone a long way, to ensure workplace safety. 

A critical factor taken into consideration during sentencing of workplace safety breaches is the need for general deterrence.  A goal of sentencing is to prevent future breaches of safety obligations by imposing meaningful penalties on companies and directors when workplace fatalities occur. 

The Court imposed a fine of $3 million on the defendant company and 10 months imprisonment for the defendant directors. However, the prison sentences were suspended on the proviso of good behaviour.  The Court said:

[99]    The sentences imposed should make it clear to persons conducting a business or undertaking, and officers, that a failure to comply with obligations under the Work Health and Safety Act 2011 (QLD) leading to workplace fatalities will result in severe penalties.

As has been said by the NSW Court of Criminal Appeal, in Bulga Underground Operations Pty Ltd v Nash, citing with approval the observations of the Victorian Court of Appeal in R v Irvine:

“Workplace safety requires employers to take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements.  General deterrence is therefore a significant sentencing factor when safety obligations are breached.”

Key lessons

A safety culture starts at, and is driven from, the top.  Directors and senior management, especially in dangerous and hazardous workplaces, need to be discussing and actively driving a safe workplace in board meetings, management meetings and when in the business.  The approach to ensuring safety needs to be systematic and thorough. 

Steps business must take to ensure a safe work environment include:

  • ensuring hazards and risks from all work are identified and active steps taken to eliminate and control those risks;

  • safe work methods are developed and communicated to workers in a consultative framework;

  • safety needs are supported with resources and knowledgeable and skilled staff;

  • safety messages are communicated regularly, reinforced and enforced;

  • safety measures are systematically audited and reviewed, never resting on one’s laurels; and

  • the Board and management ensure all these measures have occurred, and are occurring, by the provision of adequate support, diligent enquiry and reporting.

If you are driving these above steps to occur as a leader, then you can sleep peacefully at night.  If you cannot answer any questions from a regulator on these matters, then it is time to act on safety. 

Authors: James Mattson & Hannah Dawson

[1] These rates will change as of 1 July 2020.