New Laws on Workplace OH&S
The topic of ladder safety leads me nicely to the next topic for this week: the upcoming Australian laws affecting workplace health and safety. Many business owners/Insureds should consider what they need to do to prepare for the upcoming legislative changes.
Queensland, NSW and the ACT have already implemented changes and the other states and territories are expected to do the same very shortly.
The new laws introduce new duties on businesses and individuals. The duty of officers of businesses to exercise due diligence to ensure compliance is but one example.
In a nutshell, there are 3 key changes of which every insurance broker and every employer must be aware.
The Primary Duty
There are two important differences in the new legislation on how a business should ensure the health and safety of all workers and others that might be put at risk by their work.
There is also a new definition of what is meant by ‘worker’. It is no longer only an employee, but may also includes contractors and sub-contractors and their employees, employees of labour-hire companies, outworkers, work experience students, interns, and volunteers.
The duty of care is now “as far as reasonably practicable.” When the word reasonable appears, it typically creates a great deal of work for the legal profession. In the case of “reasonably practicable”, The High Court of Australia has ruled that to achieve a successful prosecution of a workplace safety offence, the Regulator must identify the measures that should have been taken to prevent the incident. The Regulator now also has the additional burden to prove that the measures that should have been taken were reasonably practicable in the case being prosecuted.
For employers, what this means is that they must determine how likely the risk is and the degree of harm that could result from doing the particular work. In addition, they have to research what is known about the risk and the ways it can be eliminated. Once they have carried out this research for the particular task, they need to show they have considered the cost associated with its elimination or minimisation, including whether the cost is grossly disproportionate to the risk.
As part of their Job Safety Analysis (“JSA”), the business owners/managers need to ensure compliance by all to avoid potential prosecution.
In normal practice, the person completing the JSA would use their common sense and training along with any Australian Standards to determine what is reasonably practicable. The risk of working off a ladder, taking my previous posting as the example, without fall protection, for example, is obvious and a conscientious employer would eliminate this risk with harnesses and a work platform with handrails. These are well-known prevention measures.
The problem that I, and many other commentators, see is in cases where risk is relatively low. Here proving a measure was reasonably practicable may require expert evidence, which will only add to the cost of doing business.
Having said this, this additional burden and cost associated with instructing experts in proving low-probability offences may be the only way to avoid a workplace safety prosecution.
The New Officer Offence
I am sure that many company directors gave a sigh of relief when the deemed liability provision was removed from the Occupational Health and Safety Act 2000 (NSW).
The new legislation means that directors and management involved in high-level management imposes a positive obligation to exercise due diligence to ensure the health and safety of their employees and others at the workplace. Among other things, it means developing and maintaining procedures and systems that ensure executives have up to date knowledge of health and safety matters and industry risks and that the company has allocated sufficient resources towards full compliance.
The Requirements to Consult and Co-operate
Under the new legislation, businesses must now consult with their workers and the new laws formalise the type of consultation required as well as introduce new powers for Health and Safety Representatives. All business owners and senior management should look closely at these provisions when amending existing policies. They also need to be extremely mindful of these new consultation obligations.
Please keep in mind that where there are two or more businesses working together on, for example, a construction project, say as principal, principal contractor, subcontractor etc. These businesses are required to consult, co-operate and co-ordinate activities on safety matters to an extent that it is reasonable in the circumstances. Fines of up to $100,000 can be levelled for breaches of this new provision.
In summary, the work health and safely legislation is focusing on increased communication and co-operation to ensure the health and safety of Australian workers and those that might be affected by businesses operations. The new rules highlight the importance of information flow between a business and its executives, its workers and other businesses working on the same project. Government hope that this front-end loaded approach to OH&S will reduce the amount of serious injuries and deaths in Australian workplaces.
For any business owner, the important thing to do is to ensure that your business is ready for this new legislation. You can best do that by understanding it and then to undertake an immediate gap analysis of existing procedures and systems. Once the gaps have been identified, the next step it to develop, document and implement any new polices to ensure compliance with your new duties. An important part of this is to review any existing contracts to ensure the new consultation requirements are met.
Insurance brokers, as trusted advisers on risk management and insurance, should be fully aware of these changes as well. To assist brokers, LMI, with Hamilton Professional, will bring a new product to market in 2012 tentatively called LMI SafetyCoach, which will be a practical guide on OH&S and compliment what we currently bring with LIM RiskCoach and LMI ContinuityCoach.