FEDERAL COURT OF AUSTRALIA
Comcare v John Holland Rail Pty Ltd [2009] FCA 771
Safety, Rehabilitation and Compensation Act 1988 (Cth)
Comcare v Commonwealth (2007) 163 FCR 207
Comcare v Commonwealth of Australia [2007] FCA 662
Comcare v Commonwealth of Australia [2009] FCA 700
Comcare v National Gallery of Australia [2007] FCA 1548
Comcare v Post Logistics Australasia Pty Ltd (2008) 178 IR 200
COMCARE v JOHN HOLLAND RAIL PTY LTD
WAD 263 of 2008
20 JULY 2009
BARKER J
PERTH
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IN THE FEDERAL COURT OF AUSTRALIA |
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WESTERN AUSTRALIA DISTRICT REGISTRY |
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GENERAL DIVISION |
WAD 263 of 2008 |
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COMCARE Applicant
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AND: |
JOHN HOLLAND RAIL PTY LTD Respondent
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JUDGE: |
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DATE OF ORDER: |
20 JULY 2009 |
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WHERE MADE: |
PERTH |
THE COURT ORDERS THAT:
1. A declaration pursuant to cl 2 of Sch 2, Pt 1 of the Occupational Health and Safety Act 1991 (Cth) on 15 November 2007, the respondent contravened cl 2(1) of Sch 2 of the Occupational Health and Safety Act 1991 by reason of it having breached s 16(1) of the said Act in that it failed to take all reasonably practicable steps to protect the health and safety at work of its employees by:
(a) failing to provide and maintain a working environment, including plant and systems of work that were safe;
(b) failing to ensure the safety at work of, and the absence of risk at work to the health of its employees in connection with the use and handling of plant and substances; and
(c) failing to provide appropriate information, instruction, training and supervision to its employees in connection with the task of refuelling the rail saw.
2. Pursuant to cl 4 of Sch 2 of the said Act the respondent pay to the Commonwealth of Australia a penalty of 1136 penalty units, equating to $124,960.00.
3. The respondent to pay the applicant's taxed costs, if not previously agreed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
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IN THE FEDERAL COURT OF AUSTRALIA |
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WESTERN AUSTRALIA DISTRICT REGISTRY |
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GENERAL DIVISION |
WAD 263 of 2008 |
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BETWEEN: |
COMCARE Applicant
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AND: |
JOHN HOLLAND RAIL PTY LTD Respondent
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JUDGE: |
BARKER J |
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DATE: |
20 JULY 2009 |
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PLACE: |
PERTH |
REASONS FOR JUDGMENT
ISSUE
1 The applicant and respondent by consent and, subject to the Court's agreement, seek a declaration pursuant to cl 2 of Sch 2, Pt 1 of the Occupational Health and Safety Act 1991 (Cth) (OHS Act), in the following terms:
(a) failing to provide and maintain a working environment, including plant and systems of work that were safe;
(b) failing to ensure the safety at work of, and the absence of risk at work to the health of its employees in connection with the use and handling of plant and substances; and
(c) failing to provide appropriate information, instruction, training and supervision to its employees in connection with the task of refuelling the rail saw.
2 For the reasons given below, the Court will make a declaration pursuant to the OHS Act in these terms.
3 The parties acknowledge that the Court should also impose a pecuniary penalty for the respondent's contravention of the OHS Act, as it has the power to do pursuant to cl 4 of Sch 2, Pt 1 of the OHS Act.
4 However, the parties are not agreed as to the appropriate range of pecuniary penalty.
5 Thus, the primary issue for determination in this proceeding is the determination of the appropriate pecuniary penalty to be imposed on the respondent in respect of its contravention of the OHS Act.
facts
6 The parties agreed the following statement of facts, which the Court accepts and acts upon. Statements by a number of employees of the respondent and others have been received into evidence at the hearing of this proceeding and support the facts as agreed.
7 The respondent is and was at all material times a non-Commonwealth licensee as defined under s 5 of the OHS Act.
8 The respondent is a national business which owns and operates several facilities under the provisions of the OHS Act.
9 The respondent was at all material times the owner and operator of a facility located at Kalgoorlie which, amongst other things, provides track maintenance services in the Kalgoorlie and surrounding areas.
10 The respondent was at all material times the operator of a worksite at Koolyanobbing railway siding (Koolyanobbing), located twenty five kilometres from Southern Cross in Western Australia.
11 On 15 November 2007, the respondent assigned eight employees, otherwise known as Team 305, to repair four rail tracks at Koolyanobbing (incident site).
12 Team 305 consisted of:
· Matthew Dwyer (Dwyer) - Thermit Welder/Track Maintainer level 3;
· Solomon Gela (Gela) - Track Maintainer level 1;
· Dave Geissmann (Geissmann) - Track Supervisor level 7;
· Mark Bartlett (Bartlett) - Track Welder/Track Maintainer level 6;
· Greg Hall (Hall) - Track Maintainer Level 2/Trainee Welder;
· Bruce Howie (Howie) - Leading Hand;
· Anthony Radosevich (Radosevich) - Team's designated health and safety person; and
· Jeffrey Webster (Webster) - Track Maintainer level 4.
13 Dwyer was employed by the respondent as a Track Maintainer Level 3 pursuant to the John Holland Rail Pty Ltd Rail Maintenance Agreement 2006 - 2009 (the JHR Agreement). He was a qualified thermit welder.
14 At the time of the incident, Geissmann was employed by the Respondent as a Track Maintainer Level 7. Geissmann was a qualified welder and the assigned supervisor of Team 305. Geissmann's position description included supervisory duties.
15 Bartlett was employed by the respondent as a Track Maintainer Level 6 pursuant to the JHR Agreement. Under the JHR Agreement, a Level 6 Track Maintainer is required to perform leading hand duties and have the ability to supervise a work team. Bartlett had been a supervisor for and a leading hand of a team of employees, otherwise known as Team 307. He was a qualified thermit welder with over 10 years experience. Bartlett usually worked with Team 307, but had been sent to work with Team 305 approximately 5 weeks before the incident.
16 Solomon Gela was employed by the respondent as a Track Maintainer Level 1 under the JHR Agreement. He had been employed for approximately 8 weeks.
17 In order to repair the four rails, Team 305 was required to use Aluminothermic (thermit) welding techniques (the works).
18 Thermit welding is a process whereby superheated liquid metal filler is used to join rails. Once the superheated filler metal comes into contact with the alloys within the rails, it melts to form a join. As the molten metal cools it solidifies to form a weld.
19 As part of the works, Team 305 was required to use a friction saw (saw) to make a cut in each rail so as to allow enough space for the molten material to form a weld.
20 In order for the saw to operate, it must have sufficient pre-mixed two-stroke fuel in its fuel tank.
21 The task of refuelling a saw (task) requires one person to pour two-stroke petrol from a jerry can into the fuel compartment of the saw. Handling petrol is, by its nature, an activity which carries risk to the extent that it has the potential to cause injury to any person carrying out the task or any person in close proximity to the saw.
22 There are numerous safety directions set out in the respondent's Refuelling Plant and Equipment on Trackwork Sites (Rail-2-126 dated January 2006) which detail the appropriate manner in which the task can be carried out safely. Included in the directions is the requirement for the saw to be removed from the rail track and placed on the ground and away from potential ignition sources prior to refuelling.
23 Prior to work commencing at the incident site at about 7am on 15 November 2007 a pre-work briefing was held.
24 At around 11am, after completing three welds, Geissmann split Team 305 into two groups of four employees.
25 The first group was directed to complete the works (first group) at the incident site.
26 The first group included:
· Gela;
· Dwyer;
· Bartlett; and
· Hall.
27 The second group (second group) was directed to work at another worksite located fifteen kilometres away from the incident site (second worksite).
28 Prior to leaving the incident site, Bartlett was assigned to act as Team Supervisor. Although accounts differ as to how this came about, it is clear that by the time Geissmann left the incident site, Bartlett became the supervisor of the first group.
29 At approximately 11.15am, Geissmann and the second group left the incident site to travel to the second worksite.
30 At the time of the incident, Geissmann was not present at the incident site.
31 By approximately 11.30am, the first group had finished the third thermit weld and was waiting for it to cool.
32 Approximately twenty minutes later, Dwyer and Gela started to prepare in order to complete the fourth thermit weld.
33 As Dwyer and Gela placed the saw onto the track adjacent to the third thermit weld, Bartlett asked Dwyer to check whether there was enough fuel in the saw.
34 Dwyer opened the fuel cap and noticed that the saw was low on fuel.
35 Dwyer asked Gela to retrieve the jerry can containing pre-mixed two-stroke fuel (jerry can) which was on the ground on the left side of the gang truck.
36 While Gela was retrieving the jerry can, Dwyer remained with the saw which was still clamped onto the rail track.
37 From his experience as a thermit welder, Dwyer was aware that the industry practice and John Holland Rail practice was to remove the saw away from the heat source and refuel it at another location.
38 On this occasion, Dwyer believed that it would be safe to refuel the saw whilst it remained clamped onto the rail track.
39 Gela picked up the jerry can and walked back towards Dwyer.
40 Gela placed the jerry can on the ground approximately two meters away from Dwyer and the saw.
41 Both Bartlett and Dwyer were aware that pressure would build up in the jerry can containing petrol and that the cap had to be released slowly. Gela was not aware of the build up of pressure and the appropriate procedure to release that pressure.
42 Upon seeing Dwyer and Gela about to refuel the saw near the newly completed weld, Bartlett instructed them to be careful.
43 Bartlett said to Dwyer not to refuel the saw near the rail track. Bartlett was aware that the saw should be removed from the track before refuelling. Dwyer thought that it would be safe to refuel the friction saw from where he was standing.
44 Dwyer advised Bartlett that it would be fine. Bartlett did nothing further to prevent Dwyer.
45 Gela removed the cap from the jerry can. As the jerry can was under pressure, fuel spurted out onto Dwyer and the recently finished third weld.
46 The fuel caught alight setting Dwyer's clothing on fire.
47 The flames travelled back towards Gela and the jerry can.
48 The jerry can caught on fire. Gela suffered singed hair and small blisters on the ends of his fingers.
49 Gela threw the jerry can on the ground to his left.
50 The jerry can landed on its side in close proximity to the gang truck.
51 As the jerry can was on its side, fuel continued to spill out.
52 Gela ran to the gang truck to splash water on his hands and arms.
53 The jerry can continued to burn as it lay on the ground in close proximity to the gang truck, which contained oxy-acetylene equipment in the back.
54 Due to the close proximity of the burning jerry can, the drawbar system of the truck was scorched.
55 Bartlett ran to the gang truck and pulled all the hoses connected to the oxy-acetylene equipment away from the flames.
56 Bartlett instructed Hall to drive the gang truck forward away from the burning jerry can.
57 Gela tried to use one of the water extinguishers stored on the gang truck, but it did not work.
58 Gela used bottled water to put out the jerry can fire.
59 As a result of the fire, Dwyer's shirt catching on fire, Dwyer sustained second degree burns to twenty percent of his body in that he sustained burns to his torso, arms and hands.
60 Dwyer was provided with first aid at the incident site.
61 Several attempts were made to contact Geissmann by radio. Eventually, Bartlett was able to speak with Geissmann to advise him of the incident.
62 Geissmann returned to the incident site and drove Dwyer to Southern Cross Hospital which was located approximately thirty minutes away.
63 Dwyer was subsequently transferred by the Royal Flying Doctors to the Burns Unit at the Royal Perth Hospital for further medical treatment.
64 On 15 November 2007, Mr Mark Watson, Regional Safety Manager at John Holland Pty Ltd notified the applicant of the incident.
65 At approximately 6.20pm on 15 November 2007, the applicant issued the respondent with an oral "Do Not Disturb" direction pursuant to s 45A of the OHS Act. The respondent complied with the direction.
66 Dwyer remained at the Burns Unit at the Royal Perth Hospital for approximately three weeks. During this time, Dwyer underwent several skin graft procedures.
67 Following the incident, Comcare investigators and representatives of the respondent attended the site and took a number of photographs.
68 Key witnesses were interviewed by the applicant by way of a tape/digital recording made on 19 November 2007, 6 December 2007 and 13 December 2007.
69 On or about 20 February 2008, Dwyer was deemed fit by his treating doctors to return to work on restricted duties.
70 On or about 24 March 2008, Dwyer was deemed fit by his treating doctors to return to work on full duties.
71 On 5 August 2008, the applicant issued the respondent with an Improvement Notice (No. 3626IN01) pursuant to s 47 of the OHS Act. The respondent complied with the Improvement Notice, and provided all other required assistance to the applicant.
72 On 18 November 2008, the applicant commenced proceedings against the respondent in this Court pursuant to s 77 of the OHS Act.
applicant's contentions
73 The applicant submits that the seriousness of the respondent's offending conduct is a critical factor to be taken into account when considering the appropriate pecuniary penalty to be imposed.
74 In this instance, the applicant says that the seriousness arises out of the circumstances in which the injuries occurred and the nature of the injuries sustained to Dwyer, and to a much lesser extent, Gela. The potential for greater harm to both Dwyer and Gela and also other workers present at the incident site is also said, by the applicant, to be of significance.
75 The applicant contends the specific factual circumstances at the time of the incident disclose that no proper job safety analysis for the task was undertaken in advance to identify the risks in carrying out the thermit welding and to enable a safe procedure to be adopted.
76 The applicant says that the nearest appropriately qualified supervisor was 15 kilometres away from the incident site at the time of the accident. The applicant says neither Dwyer nor Gela had been trained or adequately trained to safely perform the refuelling process.
77 The applicant says the exposure of risk to workers from a lack of suitable training was compounded by a lack of appropriate supervision at the time of the incident. The applicant says this demonstrates a significant breach of the employer's obligation to protect and safeguard its workers from serious harm.
78 In relation to the injuries suffered by Dwyer, the applicant points out they were so severe that he underwent a skin graft procedure, followed by a lengthy period in hospital and rehabilitation before resuming full time employment.
79 The applicant also emphasises that there was a potential for much greater harm than actually occurred in that there were a number of other flammable substances on the rear of a nearby truck. If these flammable substances had ignited, the applicant says there was potentially a grave risk to all the other workers present at the incident site at the time of the accident.
80 The applicant emphasises that the incident did not arise from a momentary lapse by the respondent, it was known by the respondent that the thermit welding task was required to be undertaken. All aspects of the task including the requirements regarding fuel could not be safely undertaken in circumstances where there had been no adequate training provided and there was inadequate supervision.
81 The applicant emphasises that the injuries sustained by Dwyer and Gela could have been prevented by the implementation of simple and well known precautions to deal with the risk of injury, specifically:
· Dwyer and Gela should have been instructed to refuel the rail saw away from the ignition source.
· Best practice of which the respondent was aware, was to instruct employees undertaking the task in question to slowly remove the lid of the jerry can to allow for the slow dissipation of fuel vapour and therefore to minimise the fire hazard.
82 The applicant says there was an element of forseeability to the possibility of serious injury occurring.
83 The applicant says this is evidenced in part by a procedure document that was in the respondent's possession at the relevant time headed "Refuelling Plant and Equipment on Trackwork Sites" which specifically recognised that if the equipment is "of a type that creates potential ignition sources, such as rail saws, grinders and so on … take the piece of equipment to be refuelled at least 10 metres away from the location".
84 The applicant says there was at least a degree of recklessness and arguably negligence in allowing further welding to be carried out in the manner that it was. That is, it was reckless to allow workers untrained in the refuelling task, to perform this activity as part of the thermit weld activities in the manner that they did without supervision, training or proper or effective instruction to them during the performance of the task.
85 The applicant says the penalty should be imposed that:
· compels attention to occupational health and safety generally and to ensure that workers while at work are not exposed to risks to their health and safety;
· take account of the aggravating feature that the risk of injury in this instance was foreseeable, even if the precise cause or circumstances of exposure to the risk may not have been;
· reflect the seriousness of the injury sustained to Dwyer;
· reflect the fact that this was not a situation involving inadvertence on the part of an employee or employer or a momentary lapse of supervision;
· provides appropriate general deterrence and specific deterrence which both require a suitable and appropriate penalty.
· encourage a suitable level of diligence by the respondent into the future to ensure that it takes all practical precautions to ensure safety in the workplace.
86 The applicant notes that the maximum civil penalty in this case is equivalent to the sum of the $242,000.00. In the circumstances, the applicant suggests that a penalty in the range of $80,000.00 to $120,000.00 would be appropriate.
Respondent's contentions
87 The respondent emphasises that it had in place, prior to the incident, an occupational health and safety system that provided, among other things, to its employees a number of work procedure and safe work method statements for the task of thermit welding. The procedures provided included a procedure dated January 2006 covering the assessment, identification and control of risks arising from the task of refuelling plant and equipment. That procedure warned that refuelling was an inherently hazardous task with the risks of fire/explosion/pollution. The procedure covered both petrol and diesel and stated that diesel was a lesser hazard.
88 The procedure for refuelling, referred to above, specified among other things that the equipment to be refuelled should be placed in a specified area referred to as a "dump" that was located:
· In an area clear of work activities and particularly "hot work".
· Clear from combustible sources.
· If the equipment was of a type that creates potential ignition sources such as rail saws, grinders and so on or close to equipment of that type, the equipment was to be taken at least 10 metres from any potential ignition source.
· That safety equipment be available.
89 The procedure also addressed the question of handling jerry cans carefully.
90 The procedure also provided for fire emergency.
91 The respondent says the crew undertaking the actual task of thermit welding at the incident site were competent to do so. Supervision was also provided to the crew. The truck being used that day was provided with fire extinguishers and a first aid kit. The fire extinguishers were routinely checked by an external provider. The equipment on the truck was also checked weekly. The crew were also provided with personal protective equipment.
92 The respondent says that it was appropriate for Geissmann, supervisor of the work to be undertaken, to split the employees into two crews and to place Bartlett in charge of the crew at the incident site. The respondent says the decision of Geissmann to put Bartlett in charge was not unreasonable, given the extent of the qualifications and experience of Bartlett.
93 The respondent says there is no factual basis to support the assertion by the applicant in its written submissions that Dwyer was not suitably trained and competent to undertake refuelling. Gela was not expected to carry out the refuelling. The facts show that on the day, he was asked to bring the jerry can to Dwyer. The persons on the team undertaking the welding work were both competent to do so and experienced. The training and experience extended to the refuelling of the rail saw.
94 The respondent points to the fact that a pre‑work briefing had been held while Geissmann was the supervisor. However, the respondent acknowledges that this did not extend to refuelling practices.
95 The respondent acknowledges that the facts show that the procedures the respondent had provided to its employees in relation to refuelling were not followed in that:
· Bartlett, the acting supervisor, although aware that the rail saw should be removed from the rail track and away from hot work before refuelling, did not prevent Dwyer from attempting to refuel while the saw remained on the track. It acknowledges that Bartlett, in a statement made 29 May 2009 identifies that the incident could have been prevented by removing the rail saw from the track; refuelling the saw in another location; and the slow release of the lid on the jerry can.
· Dwyer was aware that the rail saw ought to have been removed from the rail track where welding had occurred, but thought it would be alright on that occasion.
· No direction was provided to Gela about the risk of the jerry can being under pressure before he opened it, nor how that pressure should be released.
96 The respondent also acknowledges that its procedures in place prior to the incident were silent as to the potential risk of a build up of pressure in a jerry can holding a petrol mix and how the pressure is to be released.
97 The respondent emphasises that at all relevant times it was aware of the risks associated with refuelling of plant and equipment provided to its employees for work. It says the procedures it had provided prior to the incident, if followed that day, would have prevented the incident.
98 The respondent accepts, however, as part of the admission of the contravention that the procedure it provided was not enforced by the acting supervisor (Bartlett) on the day and that its obligations to secure the safety of employees under the OHS Act was not complied with as a result of that admission. The respondent says, however, that no deliberate contravention occurred.
99 The respondent asks the Court to take account of the significant measures the respondent had in place at the time of the incident to reduce risks associated with refuelling and also to have regard to the knowledge of the procedure by both Bartlett and Dwyer on the day to remove the equipment from potential ignition sources.
100 The respondent submits that the factual matters referred to support the view that the circumstances leading to the incident were an "aberration" of an otherwise safe system of work.
101 The respondent says there is no factual basis for the applicant to assert that the manner of the thermit welding work carried out by the employees on the day, contrary to its procedures, was known or accepted by the respondent such that its contravention was to any degree reckless and negligent.
102 The respondent also draws attention to the following facts in relation to the submission of the applicant that there was a potential for even greater harm to arise out of the contravention.
103 When Gela threw the jerry can away, the facts show it continued to burn and landed in close proximity to the back of the truck where oxy‑acetylene equipment and other substances were stored.
104 To determine the potential for the substances stored in the truck to catch alight as a result of the burning jerry can, it is necessary to take account of the following:
· The amount of petrol stored in the jerry can available to create sufficient heat to cause damage or ignition of the flammable items in the truck.
· The photographic evidence of the height of the truck, the location of the cylinders and other containers.
· The evidence of any scorching or burns sustained by the truck.
· The prompt action by Bartlett to remove any acetylene hoses from the area and of Hall to move the truck forward.
105 The respondent says the jerry can held approximately 10 litres of petrol mix and appears to have burnt out within a short period. The respondent asserts that the amount of fuel in the jerry can and the location where it landed relative to the truck were insufficient to cause a risk of the other substances catching alight.
106 The respondent also points to actions taken by the respondent following the incident in mitigation of the contravention.
107 Dwyer was given first aid and transferred for medical treatment. He was assisted in his return to work and resumed full time duties as of 24 March 2008, some four months after the incident.
108 After the incident a large number of actions were taken by the respondent to address any omissions in its safety system and procedures relating to the refuelling of equipment, such as the rail saw. Training was provided to employees, safety alerts were issued and other steps taken.
109 The respondent also says that in determining penalty it is relevant to note that there had been no previous similar incident such that the respondent should have been on notice of the nature of the risks that presented themselves that day.
110 The respondent also points to the size and scope of its operations in Western Australia. It is the employer of a large workforce, many of them carry out the work of rail maintenance.
111 The respondent has in place a multi layered and complex safety system for which it has provided a significant budget.
112 The respondent also points to the fact that it has no prior record of contravening the OHS Act.
113 In all of these circumstances, the respondent contends that in assessing penalty it is not necessary for the Court to consider a penalty designed to achieve specific deterrence. The respondent in that sense may be considered a good corporate citizen which has expressed contrition, cooperated fully with the applicant's investigation and indeed commenced its own investigation voluntarily immediately following the incident.
114 The respondent submits that the Court should consider the imposition of a pecuniary penalty in the range of $20,000.00 to $70,000.00.
DECLARATION OF CONTRAVENTION AND determination of pecuniary penalty
115 The OHS Act is relatively modern occupational health and safety legislation enacted in 1991. It reflects the more recent type of occupational health and safety legislation found in the various States of Australia, although there are some significant differences. The OHS Act primarily provides for civil enforcement of breach of duties imposed on employers, although criminal proceedings may be brought for a contravention of the Act in certain cases.
116 Section 16 of the OHS Act imposes duties on employers in relation to their employees. Section 16(1) and s 16(2) provide in particular as follows:
(1) An employer must take all reasonably practicable steps to protect the health and safety at work of the employer’s employees.
Note: An employer who breaches subsection (1) may be subject to civil action or a criminal prosecution (see Schedule 2).
(2) Without limiting the generality of subsection (1), an employer breaches that subsection if the employer fails to take all reasonably practicable steps:
(a) to provide and maintain a working environment (including plant and systems of work):
(i) that is safe for the employer’s employees and without risk to their health; and
(ii) that provides adequate facilities for their welfare at work; and
(b) in relation to any workplace under the employer’s control, to:
(i) ensure the workplace is safe for the employees and without risk to their health; and
(ii) provide and maintain a means of access to, and egress from, the workplace that is safe for the employees and without risk to their health; and
(c) to ensure the safety at work of, and the absence of risks at work to the health of, the employees in connection with the use, handling, storage or transport of plant or of substances; and
(d) to develop, in consultation with the employees of the employer, written health and safety management arrangements that will:
(i) enable effective cooperation between the employer and the employees in promoting and developing measures to ensure the employees’ health, safety and welfare at work; and
(ii) provide adequate mechanisms for informing the employees about the arrangements; and
(iii) provide adequate mechanisms for reviewing the effectiveness of the arrangements; and
(iv) provide adequate mechanisms for the variation of the arrangements in consultation with the employees; and
(v) provide for a dispute resolution mechanism to deal with disputes arising in the course of consultations held under this Act (other than section 24) between the employer and the employees; and
(vi) in the case of an employer who is required under section 34 to establish a health and safety committee—provide for the manner in which the health and safety committee is to be constituted and to operate; and
Note: The establishment of health and safety committees is dealt with in section 34.
(e) to provide to the employees, in appropriate languages, the information, instruction, training and supervision necessary to enable them to perform their work in a manner that is safe and without risk to their health.
117 The applicant, Comcare, is a body corporate established under the Safety, Rehabilitation and Compensation Act 1988 (Cth). Under the OHS Act, it has additional functions and powers. These include under Pt 4, Div 2 of the Act the power to appoint investigators who may under s 41 conduct investigations, amongst other things, concerning the breach or possible breach of the Act or Regulations or concerning an accident or dangerous occurrence that has happened in the performing of work for an employer. These investigators may be members of the staff of Comcare or other duly appointed investigators.
118 The Safety, Rehabilitation and Compensation Commission is established under the Safety, Rehabilitation and Compensation Act 1988. It also has functions and powers under the OHS Act in relation to investigations (under s 41(3)) and to give directives, issue prohibition notices and improvement notices and to conduct public inquiries.
119 Section 12 of the OHS Act confers functions on the Commission additional to those conferred by the Safety, Rehabilitation and Compensation Act 1988. Section 12A(1) of the OHS Act provides that the additional functions conferred on the Commission do not include the specific functions conferred on Comcare under the Act.
120 Section 77(1) of the OHS Act provides that proceedings for a breach of the Act or Regulations may be instituted by Comcare or by an investigator.
121 Section 79 of the Act provides:
79 Act not to give rise to other liabilities etc.
Subject to section 80, nothing in this Act:
(a) confers a right of action in any civil proceedings (other than proceedings under Part 1 of Schedule 2) in respect of any breach of a provision of this Act or the regulations; or
(b) confers a defence to an action in any civil proceedings (other than proceedings under Part 1 of Schedule 2) or otherwise affects a right of action in any civil proceedings (other than proceedings under Part 1 of Schedule 2).
122 Schedule 2 of the OHS Act then provides for a court, that may exercise jurisdiction under Pt 1 of Sch 2, to make a declaration of contravention in certain circumstances. Clause 2(1) of Sch 2 relevantly provides that:
If a court considers that a person has breached one of the following provisions, or was involved in such a breach, it must make a declaration that the person has contravened this subclause:
(a) subsection 16(1) (duties of employers in relation to their employees etc.);
123 Clause 4 of Sch 2 then provides for the making of pecuniary penalty orders, in the following terms:
4 Pecuniary penalty orders
(1) If a court has declared, under subclause 2(1), a contravention of that subclause by a person because the person breached, or was involved in the breach of, a provision listed in that subclause, the court may order the person to pay the Commonwealth a pecuniary penalty.
(2) The pecuniary penalty must not exceed the amount stated in the table to be the maximum penalty in relation to the provision concerned.
(3) The penalty is a civil debt payable to the Commonwealth. Comcare may enforce the order as if it were an order made in civil proceedings against the person to recover a debt owed by the person. The debt arising from the order is taken to be a judgment debt.
(4) In spite of the provisions of any other law, if a penalty is imposed under this clause, a court must not direct that a person serve a sentence of imprisonment in default of the payment of the penalty.
[The penalty table is excluded].
124 Clause 5 provides that Comcare or an investigator may apply for a declaration or contravention or a pecuniary penalty order, but no one else is permitted to do so.
125 Clause 8 provides that the court must apply the rules of evidence and procedure for civil matters in proceedings for a declaration of contravention or a pecuniary penalty order.
126 Clause 9 provides that a court must not make a declaration of contravention or a pecuniary penalty order against a person for a contravention if the person has been convicted of an offence constituted by conduct that is substantially the same as the conduct constituting the contravention.
127 Schedule 2 provides for further remedial actions including injunctions (cl 14), remedial orders (cl 15), undertakings (cl 16).
128 Part 2 of Sch 2 provides for criminal prosecutions in certain cases including breach of s 16(1) of the OHS Act, but only where the breach causes death or serious bodily harm and the person was either negligent as to whether that breach would cause death or serious bodily harm or was reckless as to whether that breach would cause death or serious bodily harm.
129 In this proceeding – which is a civil proceeding – as noted above, the respondent consents to the making by the Court of a declaration of contravention in respect of its breach of s 16(1) of the OHS Act by failing to take all reasonably practicable steps to protect the health and safety at work of its employees in specified ways. The applicant, Comcare, is prepared to consent also to the Court making a declaration of contravention in those terms.
130 Having regard to the agreed facts set out above, the Court considers that in relation to the incident at Koolyanobbing on 15 November 2007, the respondent did not take all reasonably practicable steps to protect the health and safety at work of its employees, as required to do so by s 16(1) of the OHS Act.
131 In those circumstances, the Court would make a declaration of contravention in the terms proposed by the parties.
132 The applicant also seeks the imposition of a pecuniary penalty under cl 4 of Sch 2. While the parties are not agreed as to the appropriate range of penalty for contravention, the respondent does not contend that a pecuniary penalty is not appropriate and should not be imposed.
133 In the circumstances, plainly a pecuniary penalty is appropriate.
134 The various remedies available in civil proceedings brought under Pt 1 of Sch 2 of the OHS Act are all designed to enable the objects of the Act to be realised. Section 3 of the OHS Act specifies the objects in these terms:
3 Objects
The objects of this Act are:
(a) to secure the health, safety and welfare at work of employees of the Commonwealth, of Commonwealth authorities and of non Commonwealth licensees; and
(b) to protect persons at or near workplaces from risks to health and safety arising out of the activities of such employees at work; and
(c) to ensure that expert advice is available on occupational health and safety matters affecting employers, employees and contractors; and
(d) to promote an occupational environment for such employees at work that is adapted to their needs relating to health and safety; and
(e) to foster a co‑operative consultative relationship between employers and employees on the health, safety and welfare of such employees at work; and
(f) to encourage and assist employers, employees and other persons on whom obligations are imposed under the Act to observe those obligations; and
(g) to provide for effective remedies if obligations are not met, through the use of civil remedies and, in serious cases, criminal sanctions.
135 Object (g) anticipates that where obligations are not met, effective remedies may be imposed through both the use of civil remedies and, in serious cases, criminal sanctions. To put the matter directly, the inclusion of Sch 2 in the OHS Act emphasises a legislative intention that contravention of the occupational, health and safety principles and duties created by the Act should be sanctioned, in appropriate cases, by civil or criminal orders.
136 In the present case, the purpose of a civil pecuniary penalty, if imposed, is to deter the particular offender from offending again, as well as having the effect of generally deterring other employers from acting in a similar way. The imposition of a pecuniary penalty may be considered to have the advantage of reminding a particular employer of the importance of complying with the duties imposed on them by the OHS Act, as well as reminding other employers of the potential consequences should they fail to comply with the requirements of the Act. The imposition of an appropriate penalty is also calculated to give the community, and in particular relevant employees, confidence that the OHS Act is taken seriously.
137 When it comes to assessing what level of pecuniary penalty should be imposed, the courts have over a number of years, in a number of different regulatory settings, developed criteria that are considered relevant to the formulation of the quantum of a civil pecuniary penalty. Accordingly, in Comcare v Commonwealth (2007) 163 FCR 207, Madgwick J at [116] emphasised that the overriding principle in assessing penalty is that the amount of the penalty should reflect the Court's view of the seriousness of the offending conduct in all the relevant circumstances.
138 At [119] – [123], Madgwick J considered that guidance in assessing the amount of pecuniary penalty under the OHS Act could be gained from a consideration of decisions relating to penalty under State occupational health and safety laws.
139 In Comcare v Commonwealth of Australia [2009] FCA 700, North J at [69] – [71] accepted and adopted the approach to assessing the penalty suggested by Madgwick J in this case.
140 Madgwick J at [120] considered that decisions relating to the New South Wales legislation identify a number of considerations that are relevant, including:
• the penalty must be such as to compel attention to occupational health and safety generally, to ensure that workers whilst at work will not be exposed to risks to their health and safety;
• it is a significant aggravating factor that the risk of injury was foreseeable even if the precise cause or circumstances of exposure to the risk were not foreseeable;
• the offence may be further aggravated if the risk of injury is not only foreseeable but actually foreseen and an adequate response to that risk is not taken by the employer;
• the gravity of the consequences of an accident does not of itself dictate the seriousness of the offence or the amount of penalty. However the occurrence of death or serious injury may manifest the degree of the seriousness of the relevant detriment to safety;
• a systemic failure by an employer to appropriately address a known or foreseeable risk is likely to be viewed more seriously than a risk to which an employee was exposed because of a combination of inadvertence on the part of an employee and a momentary lapse of supervision;
• general deterrence and specific deterrence are particularly relevant factors in light of the objects and terms of the Act;
• employers are required to take all practicable precautions to ensure safety in the workplace. This implies constant vigilance. Employers must adopt an approach to safety which is proactive and not merely reactive. In view of the scope of those obligations, in most cases it will be necessary to have regard to the need to encourage a sufficient level of diligence by the employer in the future. This is particularly so where the employer conducts a large enterprise which involves inherent risks to safety;
• regard should be had to the levels of maximum penalty set by the legislature as indicative of the seriousness of the breach under consideration;
• the neglect of simple, well-known precautions to deal with an evident and great risk of injury, take a matter towards the worst case category;
• the objective seriousness of the offence, without more may call for the imposition of a very substantial penalty to vindicate the social and industrial policies of the legislation and its regime of penalties.
141 With respect, like North J, I agree with the observations of Magdwick J and consider these are all relevant criteria to the assessment of a civil pecuniary penalty under the OHS Act.
142 However, I also concur with North J, in his emphasis of the overriding caution expressed by Flick J in Comcare v Post Logistics Australasia Pty Ltd (2008) 178 IR 200, where His Honour said that care must be taken to ensure that any listing of potentially relevant considerations do not themselves become an impermissible substitute for considering the terms of the legislation in issue or an unnecessary constraint upon a discretion conferred in otherwise unconfined terms.
143 I should also add that I consider it is relevant to the assessment of a pecuniary penalty to acknowledge, where it is the case, an admission of contravention and particularly an early admission by a respondent of its liability to the imposition of a remedy under the OHS Act. Where, for example, a respondent in a proceeding such as these early on acknowledges fault and willingness to accept a declaration of contravention, then the respondent will ordinarily be entitled to additional consideration in the assessment of the penalty. In some contexts this process is termed giving credit or "discount" on penalty. There is no statutory entitlements to such credit or a discount but it serves public policy in that it encourages a respondent to act responsibly, and may achieve a reduction in the public resources that would otherwise be required to prosecute the proceedings against the respondent.
144 In this case, counsel for the parties generally accept that the approach outlined by Madgwick J to the assessment of a pecuniary penalty is relevant in this case, and that in an appropriate case the pecuniary penalty should take into account any admission of contravention, particularly an early admission of contravention.
145 Indeed as can be seen from the contentions of the parties set out above, each party has framed its contentions by reference to these various criteria.
146 In this case, there is no doubt that the offending conduct was serious.
147 Leaving aside for the moment the consequences of the offending conduct, the employee Dwyer, called upon the employee Gela, to bring from the truck the jerry can full of two stroke fuel so that he (Dwyer) could refuel the rail saw.
148 The work generally was being supervised by the employee, Bartlett. When Dwyer called upon Gela to bring the jerry can to him, Dwyer was aware that the industry practice and John Holland Rail practice was to remove the saw away from the heat source, being the recently welded rail, and refuel it at another location.
149 However, Dwyer remained with the saw which was still clamped onto the rail track. For some reason Dwyer believed it would not be unsafe to refuel the saw whilst it remained clamped onto the rail track.
150 Gela placed the jerry can on the ground approximately two metres away from Dwyer, the saw and the weld. He did this notwithstanding that both Bartlett and Dwyer were aware that pressure would or could build up in the jerry can containing the petrol and that the cap had to be released slowly. Gela was not aware of the possibility of build up of pressure and the appropriate procedure to release that pressure. Neither Bartlett nor Dwyer made any mention of this to him.
151 However, upon seeing Dwyer and Gela about to refuel the saw near the newly completed weld on the rail, Bartlett did in fact instruct them to be careful.
152 Moreover, Bartlett said to Dwyer not to refuel the saw near the rail track. Bartlett was aware that the saw should be removed from the track before refuelling. Dwyer on the other hand thought it would be safe to refuel the saw from where he was standing. Accordingly, Dwyer advised Bartlett that it would be fine. Bartlett then did nothing further to prevent Dwyer from refuelling, notwithstanding he was supervising this work activity.
153 Gela then removed the cap from the jerry can and, as set out in detail earlier, the fuel spurted out onto Dwyer and onto the recently finished third weld. The fuel caught alight, setting Dwyer's clothing on fire, and the flames travelled back towards Gela and the jerry can. The jerry can caught on fire. Gela suffered singed hair and small blisters on the end of his fingers. Gela threw the jerry can onto the ground to his left. It landed on its side in close proximity to the gang truck.
154 At that point the jerry can was on its side and fuel continued to spill out. Gela ran to the gang truck to splash water on his hands and arms.
155 The jerry can continued to burn as it lay on the ground in close proximity to the gang truck, which contained oxy‑acetylene equipment.
156 Due to the close proximity of the burning jerry can, the draw bar system at the rear of the truck was scorched.
157 Bartlett at this point ran to the truck and pulled off all the hoses connected to the oxy‑acetylene equipment so that they could not come into contact with the flames.
158 Bartlett then instructed another employee, Hall, to drive the truck forward away from the burning jerry can.
159 While this was happening Gela tried to use one of the water extinguishers stored on the truck, but it did not work. He finished up using bottled water to put out the jerry can fire. He did not use a fire blanket, the recommended way of dealing with fire in such circumstances.
160 As a result, Dwyer's shirt catching on fire, Dwyer sustained second degree burns to 20% of his body in that he sustained burns to his torso, arms and hands. The Court received, in evidence, photographs of the second degree burns suffered by Dwyer. Plainly they were quite severe. Between Dwyer's neck and navel, the burning was widespread. His left arm below the elbow was also severely burnt and he also suffered burns on the lower part of his back. His right and left hands were also badly burned.
161 The additional evidence, in the form of statements made at relevant times by employees suggests that Dwyer, who was trained to conduct thermit welding had never seen the formal documentary procedures of the respondent concerning refuelling. However, he did know he should not refuel in proximity to a heat source, such as the recently completed weld. In that regard, he did not need to have brought to his attention the written procedure of the respondent because he was aware of this requirement.
162 Bartlett, who had been left in charge of the crew working at the incident site (even though on the face of it more experienced supervisors were available but had gone off with Geissmann and the other crew to a site some 15 kilometres away) was also aware of the requirement not to refuel in proximity to a heat source. Indeed, Bartlett was aware of the documentary procedure of the respondent in this regard. For some inexplicable reason, he allowed Dwyer and Gela to proceed with the refuelling of the saw near the heat source.
163 There can be little doubt, in my view, that while Bartlett may have had some training in respect of the respondent's occupational health and safety procedures, he had had insufficient training. Any well trained supervisor, in those circumstances, would have insisted that Dwyer not proceed to refuel the saw while the saw was clamped to the rail and near the recently made weld. He would have insisted on strict compliance by Dwyer with the requirements of the respondent and completed the refuelling at least some 10 metres from any heat source, not only for Dwyer's sake, but for that of all men working at the site.
164 In my view, if Bartlett had been well trained as a supervisor he would also have warned Gela, who plainly was not experienced, to be careful specifically because fumes or vapour or liquid might be emitted under pressure from the jerry can if he were to open it too quickly.
165 Therefore, to the extent that Bartlett was considered by Geissmann to be a person who could be put in charge of the team working at the incident site, it seems that Geissmann's judgment was poor. Whilst he might have had, as he stated in his statement he did have, reason to "trust" Bartlett, it seems that Bartlett did not have the degree of training, experience and knowledge of the importance of the procedures that one would have expected of a properly trained supervisor.
166 Consequently, it seems to me that the respondent's contravention with its own laid down procedures was a serious one. The working environment was not, at the time of the incident, a safe one. Risks were introduced, particularly in the handling of plant and substances. The evidence suggests that Bartlett, Dwyer and Gela were all insufficiently trained or supervised in relation to the refuelling process that led up to the incident to fully appreciate the risks their conduct posed to all those working at the site.
167 While there had been a prework briefing that morning before the incident, the question of refuelling was not raised or discussed.
168 The actual injuries suffered by Dwyer, in particular, emphasise that the contravention was indeed serious. They are injuries, of course, that could have been suffered by any of the men working at the site that morning.
169 That the incident could have been far worse is, in my view, demonstrable. While the respondent points to the fact that the available fuel left in the jerry can once it was thrown by Gela near the truck should be considered insufficient to have caused ignition of other flammable substances on the tray of the truck, the risk of those flammable substances catching fire or exploding was manifest. That much occurred to Bartlett as he immediately rushed to the truck and removed the hoses from the oxy‑acetylene equipment from the truck's tray. He also arranged for the employee, Hall, to move the truck out of harms way.
170 It is not necessary in my view for the applicant to prove that there would have been ignition of flammable materials on the tray of the truck if this action had not been undertaken. It is enough to recognise that there was a real risk of that happening. The fact that flames scorched the draw bar system at the rear of the truck, which is shown by the photographs in evidence, is sufficient evidence of that risk.
171 In summary, there is no doubt that the contravention was of itself serious and the consequences of the contravention were serious and might have been more drastic but for the immediate action taken by Bartlett as outlined.
172 The seriousness of the offending conduct, in all the circumstances, suggest that a significant pecuniary penalty should be imposed.
173 In my view, it is also clear that the risk of injury was foreseeable even if the precise cause or circumstances of exposure to risk were not foreseeable. However, I think it may be said in this case that the precise cause or circumstances of exposure to risk were in fact foreseeable. The respondent in its own published procedure had made it clear that refuelling – which is something that is done regularly in the course of the respondent's business – should not occur near a heat source. Commonsense would rather suggest that, without it having to be written down. Indeed Dwyer was aware of that, without having to have read the written down procedure of the respondent in that regard. To open a jerry can of fuel at 11am near a heat source, one would have thought, is an inherently dangerous thing to do and would have been appreciated by all concerned. It was certainly a foreseeable risk that fire might occur and that people in the vicinity might be seriously injured.
174 However, it is to the respondent's credit that it had at that time identified the foreseeable risk and included it in its procedures. Plainly, there was a rule within the respondent's sphere of operation that refuelling should not occur within ten metres of a heat source. The real problem was, however, that Bartlett seems not to have been sufficiently trained to act as an effective supervisor in relation to the enforcement of this procedure. Dwyer, it seems, and Gela was not specifically trained in that regard at all.
175 While the evidence shows that Dwyer was well trained as a thermit welder, there is little evidence to suggest that he was fully aware of the safety procedures. He knew enough however, to know he should not have been refuelling the saw whilst it was clamped to the rail near the recently completed third weld.
176 Nonetheless, this is not a case where it can be said that the employer is guilty of systemic failure to appropriately address a known or foreseeable risk. The evidence suggests that this type of problem, arising from a refuelling process, had not occurred before on the respondent's work sites. Nonetheless, as noted, the respondent was aware of the problem, as one would expect it to be.
177 In a case such as the present it is appropriate to impose a penalty that provides not only for general deterrence, but also for specific deterrence.
178 I am not persuaded that this is a case where there is no reason to impose a pecuniary penalty to achieve specific deterrence.
179 Whilst the respondent on the materials before the Court, is shown to be a responsible employer which takes seriously its responsibilities to provide a safe system of work for its employees, the fact is that its endeavours have been shown to be wanting in this specific instance. In my view it is important that the respondent, through the imposition of an appropriate pecuniary penalty, have brought home to it the extreme seriousness of the obligations imposed on it by the OHS Act and how significant the consequences of their breach can be.
180 I accept that the respondent has acted responsibly both before and after the incident. Immediately after the incident, without being required to do so, it immediately commenced an investigation into the incident. It took all appropriate steps to support the affected employees. It has since engaged consultants to advise it on how to improve its procedures and practices and has reviewed its safety procedures. It has held workshops and issued alert bulletins.
181 However, as I have noted above, the respondent's procedures seems to have fallen down particularly badly in this case because Bartlett, who the respondent says was in a position to supervise, plainly did not fully appreciate the responsibilities that fell upon him. The conduct of the respondent's employee signifies a failure on the respondent's part to communicate and enforce its own internal procedures concerning safety in the work place in this case. A specific deterrent is plainly called for.
182 It also goes without saying that a general deterrent is required. Employers must generally be aware that the Parliament intends that the duties and responsibilities created by the OHS Act must be complied with and that onerous penalties will be imposed in the case of serious breach.
183 It should also be said that this is not an inadvertent breach. Those supervising and carrying out the work at the site when the incident occurred, knew what they were doing. Whilst this is not a case where the Court is bound to observe that this was an accident waiting to happen, it was at least, in the circumstances, an accident that was very likely to happen in all the circumstances.
184 In my view, the objective seriousness of the offence of itself also calls for a substantial penalty to indicate the social and industrial policies of the legislation and its range of penalties.
185 I do not consider that, in this case, the penalty that I assess should be subject to some additional credit or "discount" for an early admission of contravention. Not until quite recently, after the proceeding was programmed to a contested hearing on the question of liability of the contravention, did the respondent through its solicitors indicate that it would consent to a declaration of contravention being made by the Court. However, the fact that the respondent eventually signified its admission of contravention should be taken into account.
186 As noted above, counsel on behalf of the respondent suggests that a pecuniary penalty in the range of $20,000.00 to $70,000.00 would be appropriate. By contrast, the applicant suggests, having regard to penalties imposed in a number of other OHS cases, that the penalty might be in the range of $80,000.00 to $120,000.00.
187 There is no particular "tariff" when it comes to the assessment of a pecuniary penalty in cases such as this. As noted above, the seriousness of the contravention is the overriding consideration. The facts of each case must be separately considered. The object of the legislation must be firmly kept in mind.
188 The maximum pecuniary penalty that might be imposed in this case is equivalent to $242,000.00. I note that in Comcare v Commonwealth of Australia [2007] FCA 662 a penalty of $198,000.00 was imposed. In Comcare v National Gallery of Australia [2007] FCA 1548, a pecuniary penalty of $20,000.00 was imposed. In Comcare v Postal Logistics Australasia Pty Limited (2008) 178 IR 200 a pecuniary penalty of $165,000.00 was imposed. In Comcare v Commonwealth of Australia [2009] FCA 700, a pecuniary penalty of $210,000.00 was imposed. Save in the National Gallery case, which was a minor matter on any view, the other three pecuniary penalties were imposed where the consequences of contravention were the death of an employee.
189 Whilst death did not ensue in this case, it was, as I have explained above, still a case where the offending conduct had a high degree of seriousness.
190 Having regard to the seriousness of the offending conduct and its consequences, but also taking into account the prior good record of the respondent and its admission of contravention, I do not consider it is appropriate to impose a pecuniary penalty at or near the top of the scale. I do however, consider a penalty towards the middle of the scale is appropriate. I am satisfied that a pecuniary penalty of 1136 penalty units (out of a maximum of 2200 penalty units) which is equivalent to the sum of $124,960.00, should be imposed.
conclusion and order
191 For the reasons given above, I would make the following declaration and orders:
4. A declaration pursuant to cl 2 of Sch 2, Pt 1 of the Occupational Health and Safety Act 1991 (Cth) on 15 November 2007, the respondent contravened cl 2(1) of Sch 2 of the Occupational Health and Safety Act 1991 by reason of it having breached s 16(1) of the said Act in that it failed to take all reasonably practicable steps to protect the health and safety at work of its employees by:
(d) failing to provide and maintain a working environment, including plant and systems of work that were safe;
(e) failing to ensure the safety at work of, and the absence of risk at work to the health of its employees in connection with the use and handling of plant and substances; and
(f) failing to provide appropriate information, instruction, training and supervision to its employees in connection with the task of refuelling the rail saw.
5. Pursuant to cl 4 of Sch 2 of the said Act the respondent pay to the Commonwealth of Australia a penalty of 1136 penalty units, equating to $124,960.00.
6. The respondent to pay the applicant's taxed costs, if not previously agreed.
192 I will hear from counsel as to the terms of the final orders to be made.
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I certify that the preceding one hundred and ninety-two (192) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. |
Associate:
Dated: 20 July 2009
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Counsel for the Applicant: |
Ms L Black |
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Solicitor for the Applicant: |
DLA Phillips Fox |
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Counsel for the Respondent: |
Ms WG Thompson |
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Solicitor for the Respondent: |
Australian Business Lawyers |
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Date of Hearing: |
15 July 2009 |
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Date of Judgment: |
20 July 2009 |
