Did you know that company directors who fail to take preventative action to ensure the health and safety of their workers can be held personally liable for any acts or omissions by the company, its employees and contractors?
Failure to manage risk and comply with the harmonised work health and safety (WHS) laws may expose you to significant penalties, including the risk of jail time, if convicted.
To ensure compliance, officers must exercise due diligence by:
• Continuously learning about and keeping up to date with WHS matters;
• Having an understanding of the nature of the organisation’s work and being aware of the risks workers and volunteers may face;
• Ensuring that the organisation has available, and requires the use of, appropriate resources and processes to eliminate or minimise risks to health and safety;
• Ensuring that the organisation has processes in place for communicating about safety risks;
• Verifying the organisation’s compliance with any duties and requirements under WHS law, including codes, guidelines and practice statements.
Greater accountability among aims of WHS regulators
To promote accountability, WHS regulators have taken to prosecuting directors personally, though they are not always successful.
One of the leading cases on the prosecution of directors is R v Denbo Pty Ltd & Anor  VicSC 326.
In this case, a truck driver died when the brakes of his truck failed.
The director of the company, who operated the small business, failed to ensure that the company implemented and monitored adequate safety systems, and in fact knew about the faulty brakes.
The director was convicted and fined $10,000 personally, while the company was convicted and fined $120,000.
In South Australia, the director of Colbert Transport was jailed for 12 years, with a non-parole period of 10 years, for the manslaughter of an employee who was killed when the brakes on his truck failed.
This was not a WHS prosecution, but demonstrates the extent of the risk directors face personally for WHS issues.
However, a recent case demonstrates that conviction can be avoided if appropriate safety systems are in place, and continually monitored and enforced.
In SafeWork v Omega International and Shetty  NSWDC 11, a director’s guilty plea was found, proved and [yet] dismissed without conviction after the court determined that the company’s failures “were not of a systemic nature” (at ) and that a workplace fire was caused by a worker’s conduct that was not condoned by the company’s safety systems.
The court rejected SafeWork’s claim that the director ought to be found vicariously liable for the worker’s failure to follow instructions, because the company failed to assess or obviate the risks arising from its operations.
Importantly, the court found the director had exercised due diligence and was not liable because the company had (at the director’s instigation) undertaken a number of steps, including engaging consultants to analyse hazards, implementing safety systems and providing intensive training to its workers.
Officers should foster a culture of safety
Directors who want to lead safety cultures should start by implementing an appropriate safety management system that includes strict performance management for non-compliance with safety requirements. This should include training, supervision and compliance audits.
Directors should also consider how to incentivise management and supervisory staff to champion safety, which may include regular training, linking safety improvements to KPIs and rewarding safety-conscious behaviour. Measuring outcomes will help to structure incentives for continuous safety improvements.
Finally, check that your insurance provides for directors’ and company costs, and WHS investigation costs.
Megan Kavanagh and Sam McIvor are lawyers in the employment and safety team at Colin Biggers & Paisley.
- Analysis: How likely is an interest rate cut in June?
By Adam Zuchetti
- Workplace wellness is the real trickle-down economics
By Adam Zuchetti
- Opinion: Why do so many claim to represent small businesses?
By Adam Zuchetti