WHS: Company and Director Charged – Company alone convicted

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By Laura Sowden, Partner and Theresa Au, Lawyer

A truck driver working at a transport depot was struck by a laden forklift and suffered serious injuries. Both the company and its director were charged with offences – only one was convicted – we explore why.

What Happened?

SafeWork NSW v Miller Logistics Pty Ltd; SafeWork NSW v Mitchell Doble [2024] NSWDC 58

On 4 November 2020, the injured worker, a truck driver employed by Zentry Pty Ltd (Zentry) was working at a transport depot operated by Miller Logistics Pty Ltd (Miller Logistics) in Tamworth (the site).

The injured worker was working on foot assisting the driver of a B-Double trailer when he was struck by a forklift driven by another worker. He suffered serious injuries including a femur fracture, a fracture of the right hip and an elbow fracture.

Both Miller Logistics and its Director were charged with offences, but only Miller Logistics was convicted – we explore why.

Miller Logistics charged

Miller Logistics was a person conducting a business or undertaking (PCBU). As a PCBU it had a health and safety duty under s 19(1) of the Work Health and Safety Act 2011 (NSW) (WHS Act).

That duty was to ensure so far as is reasonably practicable the health and safety of workers while the workers are at work in the business or undertaking.

It was alleged that Miller Logistics failed to comply with its health and safety duty and exposed workers, in particular the injured worker, to a risk of death or serious injury (which is a breach of s 32 of the WHS Act).

Miller Logistics did not appear in the proceedings. This meant the Court entered a plea of not guilty for Miller Logistics.

Director of Miller Logistics charged

The Director was charged with an offence. The Director’s offence was that he failed to exercise due diligence to ensure that Miller Logistics complied with its duty or obligation under s 19(1) of the WHS Act.

The Prosecutor said the Director had failed to exercise due diligence:

  1. By failing to ensure that Miller Logistics had available for use, and used, appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the conduct of the business or undertaking. the Director should have carried out his duty by “requiring, instructing or directing” Miller Logistics to take the reasonably practicable steps it should have taken to ensure safety;
  2. By failing to verify that one or more of the resources or processes were provided, implemented, and used by workers when undertaking work for or on behalf of Miller Logistics.

Judgment – Miller Logistics Guilty of offence

The Court held the evidence established there was a risk of suffering serious injury or death by being struck by a forklift while the workers were loading of transport vehicles in the loading/unloading area at the site.

This risk of being struck was known to Miller Logistics, but the only precaution it took was adopting a “3-metre rule”, which the Court considered was totally inadequate to ensure safety.

The Court was satisfied beyond reasonable doubt that Miller Logistics owed a duty under s 19(1) and the elements of the s 32 offence were made out. Miller Logistics was found guilty, and the matter was to be listed for sentence hearing.

Judgment Detail – Miller Logistics Guilty of offence

The Court considered:

(a) The Likelihood of the Risk Occurring:  The evidence proved a risk existed at the site and that risk of collisions between pedestrians and forklifts was a common risk to the industry.

(b) The Degree of Harm that Might Result from the Risk: It was obvious that death or serious injury could result if a worker on foot was struck by a forklift.

(c) What the Defendant Knew or Ought Reasonably to Have Known: SafeWork Australia guidance material addressed the risks of forklift collisions. This guidance was available to the industry for years prior to the incident.

  • (a) Particularly, the General Guide for Industrial Lift Trucks dated July 2013 stated that forklifts must not collide with pedestrians. If there is a possibility of collision with a pedestrian, then the PCBU must set up the workplace so that forklifts and pedestrians “are separated and their paths do not cross”.
  • (b) Further, the Forklifts Induction Sheet for Owners and Operators dated July 2014 stated “Most forklift incidents involve pedestrians. Forklift trucks must not collide with pedestrian and other powered mobile plant. You should make sure there are clear, separate pathways for pedestrians and forklift.

(d) Availability and Suitability of Ways to Eliminate or Minimise the Risk: There was only one sure way to eliminate the risk – to separate forklifts and pedestrians and not allow their paths to cross.

(e) The Cost Associated with Available Ways of Eliminating or Minimising the Risk: There was no evidence that there was any cost to Miller Logistics in separating forklifts and pedestrians beyond receipts from the hardware store, and the trivial cost of marking and delineating the forklift area.

Judgment – Director not guilty of offence

The Court stated that just because the Director was an officer, he did not have to do everything that the PCBU had to do to ensure safety.

The Director had engaged an employee to deal with work health and safety. This meant the failure to mandate the separation of forklifts and pedestrians was a failure by the PCBU and not the Director’s failure to exercise due diligence.

The Court was not satisfied that the prosecution had proven all of the elements of the offence beyond reasonable doubt.

Judgment Detail – Director not guilty of offence

The due diligence offence elements are outlined in s 27 of the WHS Act. The Court considered:

(1) There is a corporate PCBU which has a duty or obligation under the WHS Act: This element was established the PCBU was Miller Logistics.

(2) The accused individual is an officer of that PCBU: This was satisfied as the Director was the sole director and secretary of the PCBU Miller Logistics.

(3) The accused has failed to exercise “due diligence” to ensure that the PCBU complies with that duty or obligation:

  • (a) Here the Court was required to make findings of fact about the provision by the Director of resources and processes, and the verification that such resources and processes were implemented.
  • (b) There was evidence in favour of the Director that he took an active interest in ensuring that work health and safety and compliance was attended to. That included but was not limited to visiting the site, attendance to management meetings, allocating budgeting for workplace safety, etc.
  • (c) Further, one employee was engaged to manage work health and safety for the PCBU. The Court considered given the size of the corporation, there must be a level of delegation and the Director could not have reasonably known about everything in the business at any given moment
  • (d) There was no suggestion in the evidence that the Director had any reason not to place confidence in the WHS employee carrying out his work health and safety duties.
  • (e) The engagement of a WHS employee was the primary process or resource which the Director used to ensure that the PCBU carried out its duty under the WHS Act.
  • (f) The Court held that the Director had not failed in due diligence.

(4) The failure to exercise due diligence exposes an individual to a risk of death or serious injury: This element was not necessary to be established due to the third element not being satisfied.

What does this mean?

The Company and the Director owe different duties. Thus, the offences for a company and a director are different.

Directors and officers of a PCBU must take reasonable steps to ensure that they are actively complying with their work health and safety obligations by:

(a) acquiring and keeping up to date knowledge of WHS matters;

(b) ensuring the PCBU has resources and processes available to minimise risks to WHS;

(c) ensuring the PCBU has the resources to eliminate or minimise WHS risks;

(d) ensuring the PCBU has and implements, processes for complying with any duty or obligation the PCBU has under the WHS Act.

 

For further information, please do not hesitate to contact us.

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