Officers WHS Duties

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On 1 January 2012 the Work Health & Safety Act 2011 (WHS Act) commenced operation replacing the existing New South Wales Occupational Health & Safety Act 2000.

‘Officers’ of businesses have individual liabilities under the new legislation in addition to the primary duty of the business.

This is the first of two articles focusing on the duties of the individual officers.

The Primary Duty

  • Section 19 of the WHS Act provides that PCBU’s must so far as is ‘reasonably practicable’ ensure the health and safety of workers at work in the business. A PCBU is a person conducting a business or undertaking. In short, this is the duty of the business to ensure that it complies with WHS laws.

Due diligence requirements of Officers

  • In addition to the primary duty, Section 27 of the WHS Act places a duty to exercise due diligence on the individuals who are described as ‘officers’ to require them to take reasonable steps that will support a health and safety culture, accountability, the allocation of resources and development of appropriate policies. If an officer fails to exercise due diligence requirements, they can be held personally liable.

Who is an officer?

  • An officer includes directors and the secretary of a corporation as well as persons who make or participate in the making of decisions that affect the business or a substantial part of the business. This could include a Financial Controller or WHS Manager, depending on how the organisation operates.  The type of person who owes this duty of care should be those who are in a position to direct or influence the key decisions of the PCBU relating to compliance with WHS duties of care.

Officers and the previous regime

  • Officers’ liability under the OHS Act 2000 was ‘attributed liability’ where officers were held liable for contraventions by their corporation.  Once the allegations against the corporation were proven the directors and management were guilty until proven otherwise.
  • The new legislation has introduced the positive duty of due diligence. A corporation being in contravention of the legislation in the old regime meant automatic liability for the directors. The new regime differs in that the duty is separate and if officers can satisfy that they discharged their duty of due diligence (as defined), then they may not be in contravention of the legislation.

Duty of care for officers – due diligence

  • Officers of companies now have a duty to exercise due diligence to make sure that the business which they manage is meeting all of its duties under the Act. This a positive duty in that it is allocated to the officer in his or her own right.
  • The significant reform will require the officers of a PCBU to show leadership with regard to health & safety in order to influence health & safety outcomes and the safety performance of the organisation.

Penalties

  • A breach of the duty of an officer is a criminal offence attracting a maximum penalty of $600,000.00 and up to five years imprisonment for serious offences. This is personal liability for the officer and is separate from any liability of the PCBU.
  • In addition officers may be subject to a publicity order where their name is published in newspapers together with details of the offence committed.
  • Officers can be subject to training orders where they can be ordered to undergo training on a safety topic to prevent the repetition of the offence.
  • Officers can also be ordered to undertake specific projects or undertake restorations.

Are these liabilities insurable?

  • While directors and senior managers often have directors and officer’s liability insurance these do not cover liability in relation to work health and safety offences because these offences are criminal in nature. A prosecution and conviction for a work health and safety offence cannot be insured. Any insurance contract which purports to offer such an insurance cover is void against public policy.
  • The best that one can do is to ensure that the legal costs associated with a defendant prosecution are covered by the relevant insurance policy.

Practical outcomes from this month’s article

  • The PCBU should have an appropriate Governance structure with the right people in place who are appropriately authorised and accountable to enable WHS to be properly attended to.
  • The Governance structure should clearly identify who does and who doesn’t have ‘Officer’ duties pursuant to the legislation in the organisation.
  • We can assist you to determine who has those obligations.

Next month – What must an officer do?

  • The health and safety duty of an officer requires them to exercise due diligence to ensure compliance by the PCBU with its health and safety obligations. An officer must ensure that the PCBU has in place appropriate systems of work and must actively monitor and evaluate health and safety management. i.e. In essence, it is a duty to put in place a corporate governance regime.
  • Section 27 of the WHS Act provides six key points to define what is required under the due diligence laws. We will look at those six points in detail in next month’s newsletter.
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