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New WHS laws: What it means for industry

15-02-2012
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New harmonisation of occupational health and safety laws in Australia came into effect in NSW, Queensland and the territories from January 1 this year.

Victoria, South Australia, Western Australia and Tasmania are still to implement the new reforms.

The new changes will result in significant change to the regulation of workplace safety in Australia.

The reforms will have implications for all companies operating in Australia and, in particular, company directors and managers who will be subject to new obligations under the new laws.

The need for reform

The current OHS laws comprise separate State/Territory and Commonwealth legislation, which differ significantly from place to place.

The legislation typically imposes obligations on employers to ensure the health, safety and welfare at work of their employees and also other persons affected by their workplace. The legislation also imposes safety obligations on controllers of workplaces and suppliers and designers of plant and equipment used for the performance of work.

The current State/Territory legislation differs in respect of:

  • The nature of the obligations imposed by the legislation: In NSW, Queensland, and the ACT, the obligation is cast in stricter terms than in other jurisdictions. In these jurisdictions, employers “must ensure” safety - a very high standard and definitely more than common law standards of reasonable care. The other jurisdictions typically require employers to ensure the safety of workers so far as it is reasonably practicable.
     
  • The nature of the offences: there is a mix of criminal and civil offences between the States/ Territories.
     
  • Penalties: there are significant differences in the range of penalties imposed by the legislation.
     
  • Individual liability: there is a potential for individual directors and managers to be found liable for a breach of the legislation in each State/Territory but the test for liability differs. The individual liability position is most severe in NSW and Queensland where directors and persons involved in the management of a company are deemed to have committed the same offence as the relevant company unless they can make out certain limited defences – in effect, there is a reverse onus of proof.
    In other jurisdictions, personal liability only normally arises where there is an element of individual fault or actual involvement in the safety breach. The position in NSW has been subject to widespread criticism in recent times.
     
  • Regulations and procedures: there are prescriptive regulations and procedures with different requirements which impose a substantial compliance burden on employers operating across jurisdictions.

The divergence in the regulatory framework has prompted the implementation of uniform national OHS laws.

In July 2008, the Council of Australia Governments formally committed to the harmonisation of work health and safety laws by signing an Intergovernmental Agreement for Regulatory and Operational Reform in Occupational Health and Safety (IGA).

The model work health and safety legislation consists of an integrated package of a model Work Health and Safety (WHS) Act, supported by model Work Health and Safety (WHS) Regulations, model Codes of Practice and a National Compliance and Enforcement Policy.

Under the IGA, all jurisdictions have committed to adopting the model work health and safety legislation, with minor variations as necessary to ensure it is consistent with relevant drafting protocols and to achieve consistency with other laws and processes operating within the jurisdiction.

The harmonisation of OHS laws aims to provide a simpler system which reduces the “red tape”, confusion and compliance costs for businesses operating in different States and Territories under different OHS legislation and regulations.

The main differences between the proposed Model Legislation and the current regime are as follows:

There is a move back from the strict obligations in NSW and Queensland to “ensure safety.” These will be replaced with the lesser standard which applies in other jurisdictions (such as Victoria) to ensure safety “ so far as is reasonably practicable”.

The primary duty of care for workplace safety will be imposed on any “person conducting a business” to make it clear the obligations are not dependant on an employment relationship.

Specific obligations will continue to be imposed on persons who have “management or control” of a workplace (such as owners of construction sites).

There will be a significant increase in penalties.

Directors and officers: the new due diligence obligation
The imposition of the new positive obligation to exercise due diligence presents a new compliance obligation for “officers” of companies.

An “officer” of a body corporate is defined by reference to section 9 of the Corporations Act 2001 (Cth) ie directors but also other persons who have capacity to influence the decisions and management of the company.

No distinction is made between directors and non-executive directors - the obligation applies equally to both.

The Model Legislation provides that if a company has a duty or obligation under the legislation, an officer of that company must exercise “due diligence” to ensure that the company complies with that duty or obligation.

The Model Legislation also provides guidance on what the due diligence standard requires by defining “due diligence”.

In practice, this will require company directors and executives to ensure that the company has in place best practice OHS safety management systems and that there is appropriate reporting and review of OHS issues at board level. Company directors and executives should also ensure they are aware of the company’s OHS obligations and also the particular safety hazards and risk controls in place to manage these in the business.

Safe Work Australia is the national policy body responsible for the development and evaluation of the model Work Health and Safety laws. The Commonwealth, states and territories are responsible for regulating and enforcing work health and safety laws in their jurisdictions.

For more information visit: www.safeworkaustralia.gov.au