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Friday Workplace Briefing

Safety and Enforceable Undertakings – Risk vs Reward

The Regulators have demonstrated the desire to offer undertakings in serious contraventions of safety law where there have been high consequences.

In this week’s Friday Workplace Briefing, Andrew Douglas and Nina Hoang go through the risks versus rewards around enforceable undertakings.

To view the full episode and catch up with the week’s latest news and developments please visit this link.

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About the Hosts

Managing Principal - Victoria

Senior Associate - Workplace Relations

Episode Transcript

Andrew Douglas: Okay, next, let’s go.

Nina Hoang: Enforceable undertakings.

Andrew Douglas: Enforceable undertakings. Oh, that is the main topic.

Nina Hoang: Yeah. Yeah. That’s why I was like-

Andrew Douglas: Look, we got the same main topic.

Nina Hoang: No, no. We’re going to do it.

Andrew Douglas: Okay, look…

Nina Hoang: So there was a recent enforceable undertaking by, I can’t remember the company’s name, Alistair McDonald, where they had someone… Oh, who was run over by reversing telehandler. They had already directed them not to be in the exclusion zone, but there was no actual physical barriers.

Andrew Douglas: And there’s a… So charged with a primary duty breach and also aversion of reckless endangerment.

Nina Hoang: Yeah.

Andrew Douglas: And the New South Wales, the regulator accepted an enforceable undertaking.

Nina Hoang: Yeah. It’s going to cost 300K, I think.

Andrew Douglas: Yeah, 300. Well, it’s 380 I think it was.

Nina Hoang: Yeah.

Andrew Douglas: So the question that Nina and I talked about is we, in Victoria and in New South Wales and Queensland where most of our work is, it’s not unusual for people to say to us, “Look, could we get out of this for an enforceable undertaking?”

One of the reasons for that obviously is there is a whole number of contracts you have that a conviction triggers a risk, Coles and Woolworths type contracts. But what it normally causes a risk to be triggered to say, we could enter the contract but they start grinding in for extra money. But whatever it does, or whether it’s with government around migrant workers.

Nina Hoang: Yeah.

Andrew Douglas: All of your contracts or procurement over the next few years will look at safety as a key issue. So enforceable undertakings doesn’t create a conviction. So it’s a way through it. It’s always about 20 to 50% more expensive.

Nina Hoang: Yeah.

Andrew Douglas: And it also creates undertakings, which are more than are required by law.

Nina Hoang: Yes.

Andrew Douglas: So it’s more than reasonable. So the risk of breach is high, which allows them to re-agitate

Nina Hoang: And there’s a higher risk for officers as well.

Andrew Douglas: Yeah, no, I was going to count that, but once you breach, they cannot only get you in breach, but they can re-agitate the whole claim again and bring it.

Nina Hoang: Yeah, that’s right. Research it.

Andrew Douglas: So you can end up with three or four times the total cost. But as Nina was saying, the biggest issue within enforceable undertakings is once you get someone to promise not to do something and usually at a higher threshold than what is reasonably practical, you’ve created a new reasonably practical. Does that make sense?

Nina Hoang: Yeah.

Andrew Douglas: And you’ve got officer knowledge-

Nina Hoang: Yeah.

Andrew Douglas: Of the wrongdoing.

Nina Hoang: Because they’ve got that in writing now.

Andrew Douglas: Yeah. They’re signing off on it.

Nina Hoang: Yeah.

Andrew Douglas: So if you give an enforceable undertaking in respect of something which is an inherent risk in an organisation which is unstoppable. So getting cut with knives in meat industry. Okay? Stress related claims in teaching, you know, from child violence.

Nina Hoang: Yeah.

Andrew Douglas: Those sort of things. If you’re stupid enough to give an enforceable undertaking that you are sending your officers to jail, that’s the truth. So we always say, “Look, happy to talk about enforceable undertakings, but we will push down to reasonably practical.” We’ll make sure it is the type of one which is not going to happen again.

Nina Hoang: Yeah.

Andrew Douglas: So the risk is not thereof, no matter how good you are at being repeated, and we’ll always be part of officer training and assessment process. So, if it happens again, the officers can show they’ve gone through a risk grid and although it did happen again, they’ve applied the right resources, done the right thing with advice so they can’t be prosecuted. So, I’m not saying don’t do enforceable undertakings, but you think really carefully.

Nina Hoang: Yeah, I think people kind of assume it’s like a get jail out of free, get out of jail free card.

Andrew Douglas: Not break, probably.

Nina Hoang: But it’s not as simple as that. It’s not that you just ask them and they agree there’s a whole complicated process and it costs a lot just to go through-

Andrew Douglas: Yeah, the actual legal-

Nina Hoang: Because you have to draft it yourself.

Andrew Douglas: If you’re doing a plea of guilty compared to an enforceable undertaking, it’s actually cheaper to do a plea of guilty in most cases than go through this negotiated process. And the other part is you are left with a take it or leave it.

Nina Hoang: Yeah.

Andrew Douglas: You have a quite a small band of opportunity to do it, so.

Nina Hoang: Yeah. It’s not like back and forth negotiating looking in it.

Andrew Douglas: And you’ll see, so the section 16, under the Victorian legislation, each provision has a…

Nina Hoang: Like factors to be considered.

Andrew Douglas: Yeah, so of prosecutorial guidelines of what they’ll consider. So they’re unlikely to do it in the relation of death.

Nina Hoang: Yeah.

Andrew Douglas: It’s more than three months after charges-

Nina Hoang: Or repeat offenders.

Andrew Douglas: Yeah.

Nina Hoang: Yeah.

Andrew Douglas: They’re not inclined to do it.

Nina Hoang: And it’s got to be in the public interest to get that, yeah.

Andrew Douglas: So go there and have a look online before you start doing it. But remember say to your lawyers when you know you’re about to be charged and you receive the brief, is there a better way of doing this? But then truly, weigh the level of risk for officers in the organisation and the frequency of the nature of the risks so that you understand that you are getting the balance right. So not doing enforceable undertakings.

Nina Hoang: Yeah.

Andrew Douglas: If it’s going to affect your supply chain, definitely it’s got to be right up there. But then there is a lot of negotiation and driving to get the right terms. And then there is a whole governance process that sits behind protecting the officers afterwards.

Nina Hoang: And even though they end at a certain point, it doesn’t wipe the slate claim. We’ve had prosecutions where they’ve referred to something that’s happened 20 years ago because they’ve got that evidence.

Andrew Douglas: Yeah.

Nina Hoang: So it’s forever.

Andrew Douglas: Yeah.

Nina Hoang: Yeah. All right.

Andrew Douglas: All right, so let’s move on because that’s the second main topic.

Nina Hoang: No, it’s the other one that I need to-

Andrew Douglas: Isn’t that the other one? The other one had main topic on the screen. I believed it. Let’s go to the case study.

Nina Hoang: Roof Top Proprietary Limited, install corrugated steel roofing on commercial warehouses. RT was engaged by High Build-

Andrew Douglas: Moral turpitude.

Nina Hoang: -a commercial builder, to roof 14 warehouses on a commercial subdivision in Epping. The average height of the warehouses was 4.2 metres.

Guy, the foreman of HB instructed RT to commence work on lot 4. All framings were complete. RT developed as SWMS with HB. It involved the use of mobile scaffold fall prevention barriers and harnesses.

Terry, a roofing plumber for RT was fixing guttering to the roof of lot four when he stepped back and fell through a void suffering serious injury. He had unclipped his harness, walked off the mobile platform to the roof and fixed the fall prevention fence so he couldn’t fall from the front of the roof.

He was not aware of some recent works for RT and HB removing one’s sheet of corrugated iron to lift internally and attach solar panels to the roof. The solar panel installation had been part of the separate SWMS that Terry had no knowledge of. HB was not aware that Terry would be undertaking guttering work on the day of the incident. It was not part of the shared work schedule with RT.

WorkSafe had charged both RT and HB with breaches of primary duties to have safe systems of work and unsafe work environment, particularising Code prevention of falls in General Construction and part 3.3 of the OHS brakes, fall from greater than two metres. RT is seeking an enforceable undertaking with WorkSafe.

Andrew Douglas: Well done. What does the effect of the Code and Regulations? So, first of all, the Code and Regulations say it is definitely fall from high. Definitely a breach greater than two metres.

Nina Hoang: Yeah.

Andrew Douglas: Sets out methods of practise. When you read it and you’re going through that, you go, “Oh my God.” That’s why we brought the earlier case up about Buck because it’s so obvious. It’s such a serious breach.

Section 16 of the guidelines of VIC for Enforceable Undertakings, the charges laid two months ago, if they’re more than three months old, WorkSafe would want some exceptional explanation and they wouldn’t slow the prosecution process down so they wouldn’t turn it off at that stage.

Nina Hoang: Yeah.

Andrew Douglas: You would continue through committal stage and when that happens, can I just say to you, and I’ve been in this process where we’ve tried this all the way through, they became more and more aggressive of what they wanted in the enforceable undertaking, including costs, so-

Nina Hoang: I think it’s unlikely for falls from height that they do an EU anyway ’cause it’s one of the top prosecution areas.

Andrew Douglas: Oh, they will, they will. But if it’s death, you have no chance at all. Could RT and HB be charged with other breaches of the OHS Act? Absolutely. Okay?

Nina Hoang: Mm-hmm. Yes.

Andrew Douglas: So these are reckless endangerment charges from both of them being indifferent to a risk of fall where both parties have separate SWMS…

Nina Hoang: And not consulting with each other. The breach that as well.

Andrew Douglas: It’s not consulting. And they have both have supervision obligations.

Nina Hoang: Yeah.

Andrew Douglas: And their system is so flawed. I think both and particularly the leaders’ minds in both places we are managing it. Particularly, if RT is a small family owned business.

Nina Hoang: Yeah.

Andrew Douglas: Are a huge risk. Let’s go to the next question. What have we got? What are the risks for RT entering into an EU and especially what are the risks for Warren, the sole director and shareholder? I think we’ve canvassed these already and said-

Nina Hoang: Yeah, the rest of the known risks here.

Andrew Douglas: You know, when you’re a roofing contractor, anything to where you about falling through voids or off roofs is just a very dangerous thing to do because it is a risk. Remember Chief Justice Spigelman, my quote from the New South Wales Supreme Court’s comment about safety law on stopping stupid people doing stupid things.

When you’re working on roofs, you cannot stop some of the behaviours from people doing stuff. And if you’ve made undertakings, which are well above reasonably practical, you are in the gun. So be careful about it.

What is the likely cost of the enforceable undertaking compared to the fine? Forget about the case we talked about earlier, serious injury. Here, if it’s a first offence, you’d be at about 120 to $160,000. Magistrate’s court will be slightly less.

Nina Hoang: Yeah.

Andrew Douglas: So, because it has a maximum fine of about 400 in Victoria, you might get out with 80 to 90 depending… And magistrates are really affected, although they ought not be by the nature of the injury. So the person was paralysed, then it’d be right back up there. So the enforceable undertaking process, they will be 20 to 25 to 50% higher-

Nina Hoang: Yeah.

Andrew Douglas: In total cost involved in making videos. You know, a whole lot of stuff around who you were.

Nina Hoang: -all the stuff. Yeah.

Andrew Douglas: So think about it very carefully and we’ve got some other really exciting news. Can we go to the next slide?

Nina Hoang: Yeah, workshop.

Andrew Douglas: Yeah, Kim… Captain Kim is out with us all pain, no gain, looking at WorkSafe in Victoria’s crazy sort of view on psychological hazards that is prosecute you to death but not compensate you.

So what we’re going to do is we’re going to look at this, this is just after the end of the premium management time, look at statistical case estimates, look at how to predict premium, and then focus really deeply on psychological hazards.

Nina Hoang: And it’ll be practical. That’s a good thing.

Andrew Douglas: It’s always practical with Kim, isn’t it?

Nina Hoang: Yeah.

Andrew Douglas: And there’ll be swearing as Kim said. So it’ll be good. So that’s on. And I think for that-

Nina Hoang: Please RSVP through the email.

Andrew Douglas: Yeah, please do it that way. And you’ll get one out as well. By the way guys, we are done now, so-

Nina Hoang: Yeah, give us a thumbs up.

Andrew Douglas: Thumbs up.

Nina Hoang: Thank you.

Andrew Douglas: Cheers. Bye-bye.

Nina Hoang: Bye.

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