Australia: Unravelling WA’s safety law reforms

Last Updated: 14 November 2014
Article by Tom Martin

Introduction

Progress towards Western Australian safety law reform continues apace, with the opening of two important public consultation periods, although the co-ordination between the program for general industry and resources safety remains unclear.

On 23 October 2014, WA's long-awaited Work Health and Safety Bill (WHS Bill) was tabled in State Parliament and made available as a 'green bill' for public comment until 30 January 2015. The content of the WHS Bill predominantly follows that of the Model Work Health and Safety Bill (Model Bill), which has formed the basis for harmonised legislation enacted across the nation at Commonwealth, State and Territory level, in all jurisdictions except Victoria. WA has not yet finally committed to following the model set out in the WHS Bill which would, if enacted, involve substantial changes to the existing regime under the Occupational Safety and Health Act 1984 (WA) (OSH Act).

On 3 November 2014, the Department of Mines and Petroleum released a consultation paper prepared by consultants Marsden Jacob, seeking comment by 19 December 2014 on the Regulatory Impact Statement (Resources RIS) commissioned by the DMP in relation to resources safety law reform. The consultation paper sets out five main options for reform of existing legislation, with the DMP indicating its preference for a consolidated Work Health and Safety (Resources) Act to unify the five separate pieces of legislation which currently cover mine safety, petroleum safety and major hazard facilities (MHF).

The public consultation periods provide an opportunity to make submissions about both proposals. This legal update is intended to provide some insights into the reforms and their potential impact, and serve as a navigation tool for organisations that choose to submit their views on the proposed reforms prior to the respective deadlines.

WHS Bill – current status of reform

The recent history of OHS harmonisation in WA suggests that the reform process is by no means set in stone, and that submissions may well have an impact on the policy outcome.

Since the pivotal Council of Australian Government decision in 2008 that paved the way for OHS harmonisation, WA has expressed in-principle support for the concept, with the proviso that it would be watchful of introducing aspects of the harmonised laws that are not suitable for WA. As detailed in an update we published in August 2013, WA initially objected to the four aspects of the reforms below:

  • significantly increased penalties;
  • union right of entry for WHS purposes;
  • reverse onus of proof in discrimination matters; and
  • the power of health and safety representatives (HSR) to order the cessation of work.

In December 2012, WA commissioned Marsden Jacob to produce a Regulatory Impact Statement (WHS RIS) addressing the potential impact on the State, and small business in particular. The scope of the WHS RIS was, however, limited to the impact of the Model Work Health and Safety Regulations (Model Regs) and did not consider the content of the Model Bill.
In February 2013, WA announced that the WHS Bill had been drafted and would be introduced later that year, subject to progress towards equivalent reforms for resources safety.

It was not until August this year that the WHS RIS was tabled in Parliament and an announcement was made confirming that WA would develop and implement a version of the Model Bill for general industry, adapted specifically for WA. Shortly following this announcement was a confirmation that WA would develop aligned legislation to cover the WA mining and resources sector.

When releasing the WHS Bill a fortnight ago the Government stated that it was not 'locking in a transition' from the OSH Act to the WHS Bill, advising instead that at the end of the public consultation period the Government will consider the submissions and decide whether:

  • a variant of the WHS Bill be introduced;
  • the OSH Act will be enhanced by adopting some of its provisions; or
  • the status quo will remain.

The apparent reluctance to commit to replacing or 'modernising' the OSH Act appears inconsistent with the approach to concurrent reform being taken in respect of resources safety

Resources Safety - current status of reform

Currently, the resources safety portfolio of the DMP covers five separate pieces of legislation:

  • Mines Safety Inspection Act 1994;
  • Dangerous Goods Safety Act 2004 (including regulations dealing with MHF);
  • Petroleum and Geothermal Energy Resources Act 1967;
  • Petroleum (Submerged Lands) Act 1982; and
  • Petroleum Pipelines Act 1969.

The Marsden Jacob consultation paper released by the DMP outlines five options for resources safety reforms:

  1. introduction of a unified act for mining, petroleum and MHF, based on the 'best elements' of the National Mine Safety Framework and the Model Bill, all enforced by the DMP;
  2. introduction of modernised mine safety legislation, with a separate consolidation of the legislation for petroleum and MHF, all enforced by the DMP;
  3. introduction of separate, individual Acts for the mining and petroleum sectors, retaining arrangements for MHF, which are currently covered by dangerous goods safety legislation and the DMP in relation to process safety, and the OSH Act and WorkSafe WA in relation to workplace safety;
  4. introduction of a consolidated, modernised Act for mining and petroleum, while retaining current arrangements for MHF; or
  5. maintenance of the current structure, being separate (albeit modernised) mine safety legislation, with petroleum and MHF remaining covered by the current legislation.

For reasons including increased efficiency, simplicity and consistency, and improved workforce mobility, the DMP's preferred option is unification of the legislation, under which the DMP would become the single regulator for mining, petroleum and MHF.

Submissions on the options for restructuring the legislation are invited by no later than 19 December 2014. A stakeholder forum will be convened in November 2014.

The consultation paper makes plain that, no matter what structure is ultimately adopted, the WA Government has committed to modernising the resources safety legislation. The Minister for Mines and Petroleum has already approved the preparation of drafting instructions for the proposed Work Health and Safety (Mines) Bill, which is expected to be implemented by mid-2016. The reform process for petroleum and MHF is yet to be finalised, but is broadly expected to occur between 2015 and 2017. The consultation paper also refers to the reforms to the OHS Act and its replacement by 'the proposed Work Health and Safety Act for general industry'.

If the resources safety legislation is modernised as expected, retention of the status quo with the OSH Act in its current form would 'uncouple' arrangements for safety in the resources sector and general industry. Although that appears an unlikely outcome, it seems that the door remains open for the Government to reconsider its approach to the WHS Bill and one can expect that all public submissions will be duly considered.

WHS Bill – analysis and commentary

Despite some material alterations, the WHS Bill includes practically all the core provisions of the Model Bill, and differs significantly from current arrangements under the OSH Act. The WHS Bill's departures from the Model Bill leave untouched the provisions containing the general duties owed under the legislation, which is where the substance of the reform lies.

Without the Regulations that will support the WHS Bill, it is difficult to assess the likely impact of the reform package as a whole. For some time, it has been expected that WA will enact much more limited regulations than the Model Regs, supported by more extensive reliance on guidance material and codes of practice. This expectation gained further support with the publication of the WHS RIS, which indicated that the Model Regs would lead to some higher costs for business. Interestingly, the transitional provisions to the WHS Bill currently provide for existing WorkSafe codes of practice 'prescribed' under the OSH Act to become 'approved' codes of practice under the WHS Bill on its commencement. Many of those codes will presumably refer to outdated provisions in the OSH Act and regulations and will require updating. This may be an indication that the Government does not intend, at least initially, to make use of the codes of practice and guidance material issued by SafeWork Australia that have been adopted in other jurisdictions with model laws.

New basic concepts

The most important conceptual change to the position under the OSH Act is the shift from the employer as main duty-holder, to a new type of duty-holder: the person conducting a business or undertaking (PCBU). This is intended to better reflect the modern Australian workplace, where the employment relationship may no longer be the relevant or prevalent method by which workers are engaged.

In line with this position, the general duties under the WHS Bill are mainly owed in respect of 'workers', broadly defined, rather than employees. The WHS Bill applies the same definition of 'worker' that is found in the Model Bill, save for the exclusion of volunteers and prisoners.

New positive duties imposed on PCBUs to consult with relevant workers, and to consult, co-operate and co-ordinate activities with other duty-holders, are intended to drive the increased level of communication and engagement required by this new paradigm.

We published a detailed update in March 2011 on PCBUs, workers and consultation, as well as aspects of the Model Regs.

Another much-publicised aspect of the reforms is the imposition of a duty on PCBU officers, as broadly defined in the Corporations Act 2005 (Cth), to exercise ' due dilligence' to ensure compliance by the PCBU, by reference to specific categories of knowledge and conduct that an officer must address to discharge the duty. The officers' duty is positive and pro-active, and liability will no longer be tied to that of the company, as under the OSH Act.

Duty holders and duties

The general duties under the WHS Bill include a number of significant changes to those under the OSH Act.

  • All main duties under the WHS Bill are limited to the extent to which a person has the ability to influence and control the matter, or would have but for an agreement to the contrary, a provision taken from a similar amendment to the model laws in South Australia (SA) and not found in the Model Bill. This re-states the approach adopted in case law, and repeats a limitation that applies under the Model Bill in the case of multiple duty holders. As was the case in SA, the intention is to mitigate the effect of removal of the OSH Act's 'control test', as discussed immediately below.
  • The primary duty of a PCBU is to ensure the safety of 'workers', including contractors and other non-employees, resulting in the elimination of the 'control test' which applies to principal/contractor relationships under the OSH Act. The control test applies to impose the duty of an employer on a principal in respect of its contractors but only in respect of matters over which the principal has the 'capacity to exercise control'. While the issue of control will remain relevant to what is reasonably practicable, it will no longer govern whether the duty is owed in the first place. The impact of the removal of the control test is intended to be mitigated by the addition of the limitation to duties described immediately above. This change will have consequences for contractor management, elevating the risk of liability for principals who have previously been able to contend that a lack of capacity to exercise control over a contractor in relation to a particular issue, excused them from the duty of an employer. Organisations most affected will be those with significant numbers of contractors in their workforce, most notably players in the construction industry.
  • PCBU's must also ensure, so far as reasonably practicable, that the health and safety of 'other persons' is not put at risk 'by work carried out' as part of the PCBU's business or undertaking. This duty is substantially broader than its equivalent in the OSH Act, and similarly worded provisions in equivalent legislation have been found to extend to risks to public safety. This has potential to elevate the risks for public and local authorities and other private organisations with high levels of public interface in relation to matters that have traditionally not been dealt with under the OSH Act. Schedule 1 of the Model Bill, dealing with the risk to public safety from dangerous goods and plant, has been omitted, although the potential application of the WHS Bill to public safety remains.
  • The duty of a PCBU who has control or management of a workplace is more sensibly limited in its scope when compared to the equivalent duty under the OSH Act, which applies to each person that has to any extent control of a workplace, simplifying the position in workplaces where there are multiple parties each with a degree of control, e.g. in the construction industry, or retail property management.
  • Expanded 'upstream duties' apply to PCBUs that design, manufacture, import or supply plant, substances or structures, and PCBUs that install, construct or commission plant or structures, that are to be used or could reasonably be expected to be used at a workplace. Much greater emphasis is placed on modern 'safety in design' concepts than under the OSH Act, which will be relevant to a range of businesses, including manufacturers, architects, consultant engineers, builders and materials suppliers. The commencement of these new duties is covered by transitional provisions.
  • Workers will not have the specific duty to report hazards to their employers that currently applies to employees under the OSH Act. They will, however be subject to greatly increased maximum penalties of up to $300,000 or 5 years imprisonment, or both (as discussed below).
  • As well as being more prescriptive and applying to a broader category of corporate officers, the new duty of officers' due diligence expressly applies to insolvency practitioners and senior management of public and local authorities (including Councils and Government departments and agencies), which will affect IPs, as well as senior public servants and local government officials (with the exclusion of elected members, acting in that capacity).
  • Specific offences will apply to persons who conduct activities without the proper authorisations, such as licences, permits or registrations, and to PCBUs that permit unauthorised activities within their operations.

Dispute resolution and workers' representation

Although the WHS Bill does not include union right of entry, HSR's powers to order the cessation of work or a reverse onus of proof for discrimination matters, there are important changes that are likely to impact on industrial relations in relation to safety issues:

  • New vertical consultation obligations include content on when PCBUs must consult with workers, and what is required.
  • New rules for setting up workgroups, election of HSRs and safety committees will facilitate employers being required to consult with non-employees, or across multiple workplaces or businesses, in the same way that they have traditionally consulted with employees at a single workplace.
  • Workers will be entitled to representation during dispute resolution, which may include their union or legal representatives. Representatives are authorised to enter premises for the purpose of discussions to resolve a dispute (arguably providing a form of right of entry to unions for WHS purposes). Parties must make reasonable efforts to achieve a timely, final and effective resolution of the issue.
  • Prohibitions against discrimination, coercion, inducement and misrepresentations are akin to the extensive adverse action provisions of the Fair Work Act 2009 (Cth), with elevated fines and civil remedies (including uncapped compensation) although reverse onus of proof will not apply. The provisions apply to unlawful discrimination in commercial dealings between bodies corporate, although to a lesser extent than the Model Bill.

Compliance and enforcement

The WHS Bill involves significant changes to the compliance and enforcement provisions under the OSH Act:

  • Despite the earlier indications to the contrary, the WHS Bill contains the increased penalties in the Model Bill, which includes a maximum penalty for a body corporate of $3M for the most serious category of offence, increased from $500,000 for a first offence under the OSH Act. The maximum penalty for officers is $600,000 or 5 years imprisonment, or both.
  • The standard limitation period for prosecutions will remain three years instead of the two years in the Model Bill, or one year after a coronial report, or inquiry or inquest is complete, where it appears that an offence has been committed. Given the major delays in coronial proceedings in WA, this may be problematic. The most serious category of offences may still be prosecuted after the limitation period, in the case of fresh evidence coming to light.
  • The WHS Bill does not adopt the enforceable undertakings, infringement notices or civil penalties provided for in the Model Bill, but includes other new alternative enforcement mechanisms such as adverse publicity orders, restoration orders (effectively requiring the payment of potentially uncapped compensation), WHS project orders, training orders and court-ordered WHS undertakings.
  • It will be mandatory to notify WorkSafe of dangerous incidents as well as serious workplace injuries, although PCBUs will not be subject to the Model Bill requirement to maintain records of notifiable workplace incidents for five years. New provisions also require the preservation of the site of an incident pending the arrival or direction of an inspector.
  • Inspectors' powers are broadened, but made subject to more stringent requirements than under the OSH Act. Inspectors may issue non-disturbance notices and apply for injunctions. The time in which to appeal an improvement notice will be that indicated for compliance with the notice, rather than the current 14 days. The regulator will also be granted a new power to compel the production of evidence, including documents and oral testimony, separate from inspectors' usual powers.

Regulations, scope of application and other matters

  • The existing delineation between the OSH Act, mine safety, petroleum safety and dangerous goods safety, including the scope for ministerial directions as to which Act operates to specific sites or activities, has been retained in the WHS Bill, resulting in the continuation of existing uncertainty over which legislative scheme is to apply in certain circumstances.
  • The power of the Executive to make regulations under the WHS Bill is substantially broader than that under the OSH Act, even though it appears likely that the regulations will be less extensive than the Model Regs.
  • The jurisdiction of the WA Industrial Relations Commission, constituted as the Work Health and Safety Tribunal, will increase with the expanded discrimination provisions and rights of review in respect of decisions made under the WHS bill.
  • The Commission for Occupational Health and Safety, and the role of WorkSafe Western Australian Commissioner, have been retained, although a mandatory five year statutory review is to consider whether there is a continuing need for the Commission.

Preparing a submission in the public consultation process

There is a public consultation page for the WHS Bill on the WorkSafe website where you will find the WHS Bill, the WHS RIS, a template for submissions and other useful material.

The consultation paper regarding the resources safety reforms, together with a form for submissions, may be found on the Marsden Jacob website.

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