Boland v Big Mars Pty Ltd [2016] SAIRC 11

Labour hire firms were taught an important lesson when a South Australian court imposed the State's highest ever penalty against a single entity under the new laws for failing to ensure the safety of one of its workers who suffered severe burns at a host employer's premises.

Background

As the shift away from traditional employer-employee relationships in the workplace continues to gain momentum, more and more businesses are introducing labour-hire engagement models as a way of structuring their workforce. Such a shift highlights the need for businesses to re-examine their approach to work health and safety, including the division of responsibility between labour hire employer and host employer for those businesses operating out of jurisdictions within the harmonised Work Health and Safety Act regimes (WHS Act).

Under the WHS Act, a 'person conducting a business or undertaking' will owe a primary duty of care to ensure, so far as is reasonably practicable, the health and safety of all workers. This broad duty of care cannot be delegated, but it can be shared and it will be enforced. For labour hire businesses this means that the business itself, as well as the host employer to whom the worker is supplied, will each retain responsibility for that primary health and safety duty as well as a further duty to consult, co-operate and co-ordinate activities with the host employer in respect of that worker.

The decision

On 27 April 2016, a South Australian labour-hire company was fined $240,000 for its breach of the State WHS Act, including in respect of its attempts to delegate the businesses' safety duties to the host employer. In the decision of Marie Boland v Big Mars Pty Ltd, Industrial Magistrate Stephen Lieschke found that the labour hire-company, Big Mars Pty Ltd, had 'failed miserably to carry out any of its fundamental safety responsibilities' after 21 year old migrant worker Mr Hsiao suffered serious burns to the bottom half of his body when he slipped into a bath of caustic soda while working at the host employer's abattoir. Among other failings, Big Mars had failed to:

  • implement any adequate system of hazard identification or risk assessment specific to the host employer's premise;
  • check or audit that the host employer provided and maintained written safe operating procedures for the use of relevant equipment, and that such procedures were provided to Mr Hsaio;
  • ensure that the work instructions provided to Ms Hsiao were translated into a form he could understand (Ms Hsiao had difficulty reading documents in English); and/or
  • assess the adequacy or otherwise of any training provided to Hsaio by the host employer, nor provide any information, instruction or training to Hsiao itself in respect of those tasks he was being retained by the host employer to perform.

The Magistrate considered that all of these steps were simple tasks for the labour hire business and ones that should have been put into place, particularly given the fact that the business had 40 employees placed at that host. He was particularly critical of the fact that despite Big Mars' early guilty plea, no statement of contrition had been made in circumstances where the business' breaches were so serious, and had caused such a degree of loss and damage to Ms Hsiao.

In sentencing Big Mars, the Magistrate noted his doubts of ongoing compliance by Big Mars in respect of its work health and safety obligations and therefore considered individual deterrence to be an important aspect of the sentencing process. He also confirmed that general deterrence for labour hire businesses as a sector was an important factor and one which had influenced his decision to impose the significant penalty.

Lesson for labour hire companies and employers

In this case, the Magistrate stressed that labour-hire employers cannot simply 'leave all safety considerations up to' the host employer, but that instead a labour-hire employer must be astutely proactive in all stages of the workers assignment with the host employer including prior to the workers commencement, and at all stages throughout the life of the assignment. In particular, he stated that Big Mars had a responsibility to obtain specific details of the tasks that its worker would be required to carry out and attend the worksite to identify any foreseeable hazards and resulting risks of injury associated with those specific tasks.

The host employer, Thomas Foods International, will appear before the court in June.

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