On 17 June 2020, we reported on Queensland's first industrial manslaughter conviction under the Work Health and Safety Act 2011 (WHS Act). In this article, we look at the recent Ardent Leisure prosecution.
In the Queen v Brisbane Auto Recycling Pty Ltd and Hussaini and Karim, the District Court fined the company $3 million and its directors, Hussaini and Karim, each received a custodial sentence of 10 months (suspended for an operational period of 20 months) for the workplace death of one its workers.
Recently Ardent Leisure Group Limited (Ardent) was prosecuted under the WHS Act following the deaths of four patrons at its theme park, Dreamworld.
Ardent was prosecuted under Section 32 WHS Act (category 2) which provides for civil penalties only while Brisbane Auto Recycling and its directors were prosecuted under Section 31 WHS Act (category 1) which deems an offence is a crime.
It is recorded that Ardent Leisure was fined $3.6 million.
The WHS Act exposes not only bodies corporate but their officers to prosecution for breaches of such Act.
The premise of this article is that the effects of the prosecutorial regime under the WHS Act are likely to become even harsher.
Queensland is a party to Safe Work Australia (SWA), an Australian government initiative to harmonise Workplace Health and Safety legislation in the Australian States and Territories. SWA was instrumental in formulating a model Work Health and Safety Act (Model Act) which the Australian government enacted in 2011. All Australian States and Territories save Victoria and Western Australia have adopted the Model Act. Western Australia is "currently consulting on options to implement elements of the model laws". "In the jurisdictions where the model laws have been implemented, each state and territory is expected to make variations to ensure the laws operate effectively in their jurisdictions. In some instances, states and territories have also made more substantial variations."1
The SWA national review of the model Work Health and Safety laws (Report)2 recommended that the Model Act be amended to make it an offence to:
- enter into a contract of insurance or another arrangement under which the person or another person is covered for liability for a monetary penalty under the Model Act;
- provide insurance for a grant of indemnity for liability for a monetary penalty under the Model Act, and
- take the benefit of such insurance or such an indemnity.3
The author of the Report records an "overwhelming support for the option to specifically prohibit insurance arrangements within the model WHS laws4
The rationale to the recommendation lies in the belief that to ensure greater compliance with the model WHS laws monetary penalties imposed under WHS legislation should be "an effective deterrent and are not nullified by being paid through insurance coverage or an indemnity".5
It has long been a concern whether the insurance policies providing protection against monetary penalties are in fact lawful as being against public interest but while insurance companies have not sought to argue the point and while courts have been prepared to uphold such contracts of insurance except in instances of willful or dishonest conduct such policies have protected the insureds against the effects of substantial monetary penalties.
The recommendation seeks to remove that protection.
Recently, New South Wales amended its Work Health and Safety Act 2011 to incorporate the recommendation of the Report. In the circumstances and In view of the expressed "overwhelming support" for the application of the recommendation it is reasonable to expect other jurisdictions including Queensland to also amend their WHS laws to reflect the Report's recommendation.
If the premise of this article is correct, it is even more critical for employers and their officers to implement, review and maintain a risk management strategy.6
1 Safe Work Australia website – Law and regulation
2 Review of the model Work Health and Safety laws Final report December 2018 (Review Report)
3 Review Report – Recommendation 26: Prohibit insurance for WHS fines
4 Review Report page 137
5 Review Report pages 136 and 137
6 Article – Queensland's First Industrial Manslaughter Conviction by Greg Moroney – 17 June 2020
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