In this In Brief, we examine a prosecution that WorkSafe WA Commissioner Lex McCulloch described as one that “illustrates that directors have an obligation to directly intervene if necessary in situations where unsafe work practices are taking place”.
In Fry v Keating  WASCA 109 (23 April 2013), the Western Australian Supreme Court, Court of Appeal served a timely reminder that ignorance of occupational health and safety matters is no excuse for company officers.
Section 19 of the Occupational Safety and Health Act 1984 (WA) (OSH Act) requires an employer, so far as is practicable, to provide and maintain a working environment in which its employees are not exposed to hazards.
Section 55 of the OSH Act provides that where a body corporate is guilty of an offence under the OSH Act, and it is proved that the offence occurred with the consent, connivance of, or was attributable to any neglect on the part of any director, manager, secretary, other officer of the body (or any person purporting to act in the capacity of an officer/ manager), that person is also guilty of that offence.
The policy underlying section 55 is that a company operates at the direction of its controllers. Directors and other officers determine a company’s approach to occupational health and safety. Section 55 of the OSH Act holds those persons accountable if the company breaches its obligations because of their consent, connivance or neglect.
A rigger (Mr Murrie) employed by D&G Hoists and Cranes Pty Ltd (D&G Cranes), a crane and hoist hire company, was killed when a pack of 16 crane components – stacked interwoven and weighing over 375 kilograms each (known as a L68 pack) – fell from a crane and struck him.
D&G Cranes was prosecuted by WorkSafe WA for breaching section 19 of the OSH Act. Two directors of the company were also prosecuted on the basis that the company’s breach was attributable to their neglect, as a result of the operation of section 55.
The evidence revealed that there were two methods of lifting the L68 packs:
In 2004, the risks associated with the appropriate methods of slinging a L68 pack had been identified and the directors of D&G Cranes had resolved with the Yard Supervisor that Method 1 should be the only method adopted.
The Yard Supervisor had a number of administrative duties as part of his role which prevented him from providing his full attention to the work carried out in the yard.
In this instance, the L68 pack had slipped when it was being lifted using Method 2, which had previously been banned.
The core evidence focussed on the fact that the directors were aware that:
At first instance, it was held that:
D&G Cranes was convicted of failing to ensure a safe working environment and fined $90,000. The two directors were also convicted on the basis that the offence by D&G Cranes was attributable to their neglect. They were each fined $45,000. They appealed to the Supreme Court of Western Australia.
In the Supreme Court, McKechnie J held that the directors were not remote from the business of D&G Cranes. Instead, the directors were active, hands-on and (in the circumstances) were neglectful in being unaware that the supervision system had broken down and by failing to enforce the use of Method 1.
His Honour stated that:
“Their eyes might have been shut to the possibility that Method 2 might, on occasion, be used, but in the absence of a system to enforce the use of Method 1 at all times, or to have a proper induction procedure in place, the directors should have recognised the possibility that an employee might not always use Method 1”.
McKechnie J dismissed the directors’ appeals against their convictions.
The directors then appealed to the Court of Appeal on the grounds that the prosecution had failed to provide evidence that they ought to have known that Method 2 was being used.
The directors relied on evidence that:
The Court of Appeal rejected the directors’ arguments and held that the findings at first instance, which were not contested on appeal, were sufficient to support their convictions. It held that the directors had an obligation to ensure that Method 1 was in use and that they had failed to do so because the directors knew:
The Court of Appeal considered that, having this knowledge, the directors were not entitled to assume that Method 1 was being used at all times. The directors needed to take reasonable steps to verify and ensure that Method 1 was, in fact, being used.
Accordingly, the Court of Appeal held that D&G Cranes’ failure to ensure the health and safety of the employee who was killed was attributable to the neglect of each of the directors. It considered that both directors had failed to ensure that the company had in place a safe system of work for the slinging of L68 packs, and failed to enforce Method 1 (which they knew to be safe).
Fry v Keating confirms that in Western Australia, for the purposes of section 55 of the OSH Act, ‘neglect’ concerns not only what the officer or manager knows at the time of the breach but also what they ‘ought to have known’ in the circumstances.
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