Director and manager occupational health and safety (OHS) liability from 1 January 2012

OHS harmonisation remains on track to occur by 31 December 2011, with State and Territory OHS legislation to be replaced by a model Work, Health and Safety Act. The States/Territories other than Western Australia have agreed to pass laws that mirror the Work, Health and Safety Bill. Workplace Relations Ministers will also be asked to agree on model Regulations in June 2011.

There are a number of important proposed changes.

Under the Bill, an officer of a body (eg company, partnership, government department) must exercise due diligence to ensure that the body complies with its OHS duties. Significantly, the term 'due diligence' is now defined and provides an important sign-post for employers. The definition provides guidance on what you can be doing to manage the OHS risk within your organisation. The Bill proposes that 'due diligence' will mean that an officer is to:

  • Acquire and have up to date knowledge of work OHS matters.
  • Understand the nature of the operations of the business and the hazards and risks associated with it.
  • Ensure that the business uses appropriate resources and processes to identify and control or eliminate hazards associated with the operations of the business.
  • Ensure that the business has appropriate processes for receiving and considering information on incidents, hazards and risks and responding in a timely way to that information.
  • Ensure that the body has, and implements, processes for complying with any duty or obligation of the body under the Act (this might include the obligation to notify incidents, consult with workers, etc).
  • Have in place a system for verifying compliance with the business' safety obligations.

An 'officer' is defined to include an officer within the meaning of section 9 of the Corporations Act 2001 (Cth), which, for corporations means any of the following:

  • Director or secretary.
  • Person who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business or undertaking of the body.
  • Person who has the capacity to affect significantly the body's financial standing.
  • Receiver/Manager/Liquidator.

In the case of the Crown, a public authority or local authority, 'officer' means a person who makes, or participates in making decisions that affect the whole, or a substantial part, of the business or undertaking of the relevant government department or that authority, excluding Ministers.

Among the most significant issues for directors and managers under the Bill are:

  • The substantial increase in penalties.
  • The restriction of imprisonment to offences involving recklessness on the part of the officer.
  • An officer is not deemed to commit an offence simply because his or her company commits an offence (which compares favourably to deeming provisions in the NSW OHS Act).
  • Decision makers within government departments and authorities are on equal footing in terms of exposure to prosecution as directors and managers in the private sector.

The Bill signals that, in the move to a national OHS system, directors and managers need to be as vigilant as ever in establishing and maintaining safe systems of work. Although the deadline for harmonisation is 31 December 2011, the laws could be enacted earlier. We recommend that you consider reviewing existing systems and procedures to determine whether changes are required with the introduction of the new laws. This is also a useful task so that commercial arrangements entered into now will not be inconsistent with the new laws when they are introduced.

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This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances.