FEDERAL COURT OF AUSTRALIA
IN THE FEDERAL COURT OF AUSTRALIA
DATE OF ORDER:
THE COURT ORDERS THAT:
1. Pursuant to sub-clause 2(1)(a) of Schedule 2, Part 1 of the Occupational Health and Safety Act 1991 (Cth) (“OHS Act”) that the respondent contravened sub-section 16(1) of the OHS Act on 1 December 2011 by failing to take all reasonably practicable steps to protect the health and safety at work of the respondent’s employees, and in particular Mr Alexander Hogg, by failing to:
(a) maintain a working environment that was safe for the respondent’s employees and without risk to their health;
(b) in relation to a workplace under the respondent’s control, ensure that the workplace was safe for employees and without risk to their health;
(c) ensure the safety at work of, and the absence of risks at work to the health of, the employees in connection with the use of plant; and
(d) provide the respondent’s employees with the information, instruction, training and supervision necessary to enable them to perform their work in a manner that was safe and without risk to their health.
2. Pursuant to clause 4 of Schedule 2, Part 1 of the OHS Act, the respondent pay a pecuniary penalty in respect of the contravention of sub-section 16(1) of the OHS Act in the amount of $110,000.
3. The respondent pay the applicant’s costs in the proceeding as agreed or taxed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
QUEENSLAND DISTRICT REGISTRY
QUD 778 of 2013
JOHN HOLLAND PTY LTD (ACN 004 282 268)
23 APRIL 2015
REASONS FOR JUDGMENT
1 Before the Court is an originating application filed on 22 November 2013 by Comcare against John Holland Pty Ltd (John Holland). In that originating application Comcare sought the following orders on the grounds stated in the statement of claim filed with the application:
1. A declaration under sub-clause 2(1)(a) of Schedule 2, Part 1 of the Occupational Health and Safety Act 1991 (Cth) (OHS Act) that the Respondent breached sub-section 16(1) of the OHS Act.
2. An order pursuant to clause 4 of Part 1 of Schedule 2 of the OHS Act that the Respondent pay a pecuniary penalty in respect of the breach of sub-section 16(1) of the OHS Act.
3. An order that the Respondent pays the Applicant’s costs.
4. Such further or other orders the Court deems fit.
2 I note in particular that before the Court was a statement of agreed facts filed on the morning of hearing. Further, Mr Hoare, Counsel for Comcare provided me with a draft order at the hearing on 22 April 2015, with no objection from Mr Dixon SC, Counsel for John Holland.
3 In the circumstances of this case, I am of the view that John Holland has contravened subs 16(1) of the Occupational Health and Safety Act 1991 (Cth) (“OHS Act”) by failing to take all reasonably practicable steps to protect the health and safety at work of its employees and that John Holland should be ordered to pay a pecuniary penalty in respect of this contravention of subs 16(1) in the amount of $110,000. I am also of the view that John Holland should pay Comcare’s costs in this proceeding.
4 I have formed this view for the following reasons.
5 As I have already explained, before the Court was an agreed statement of facts filed on behalf of both parties, on the morning of the hearing. This document was helpful in identifying key background information concerning the workplace and structures used by John Holland and the incident the subject of these proceedings.
6 In October 2011, the John Holland commenced constructing the C3 Cross Passage Tunnel (“the Tunnel”) on the Airport Link Tunnel project (“the Workplace”). This is a major infrastructure project in the city of Brisbane. At this time, John Holland commenced using three metre arch form structures (“arch form structures”) to guide and hold wet concrete to form the arched roof and sides of the Tunnel.
7 In or about late October 2011, John Holland commenced manufacturing a metal platform being 900 millimetres by 850 millimetres and weighing 47 kilograms (“metal bridge”) which was intended to sit between walkways on each of the arch form structures. After 3 November 2011, John Holland commenced using the metal bridge between two arch form structures in the Tunnel during the pouring of concrete in the Tunnel.
8 The design of the structure was such that the metal bridge was attached to the arch form structures, by four locator brackets on the metal bridge being placed over and resting upon steel bars between the walkways on the arch form structures. This structure was in place for the purposes of pouring concrete in the Tunnel for the period 3 November 2011 to 1 December 2011 (“the relevant period”).
9 During the relevant period, the metal bridge was attached to the arch form structures between the walkways on fourteen occasions during the pouring of concrete in the Tunnel. On each occasion the metal bridge was suspended approximately 4.7 metres above the floor of the Tunnel during the pouring of concrete. During the relevant period employees of John Holland would remove the metal bridge from the arch form structures on each occasion in order to facilitate the movement of the structure from one location to another.
10 The incident the subject of these proceedings occurred at the workplace on 1 December 2011.
11 Relevantly, the incident involved four employees of the John Holland (“the work crew”), who were preparing to lower the arch form structures prior to moving the arch form structures to a new location in the Tunnel. This work crew consisted of the following employees of John Holland:
Mr Brett Pengelly (Mr Pengelly) – Shift boss and supervisor;
Mr Alexander Hogg (Mr Hogg) – Leading hand and tunneller;
Mr Ben Bambling (Mr Bambling) – Labourer and tunneller; and
Mr Owen Meikle (Mr Meikle) – Telescopic handler (telehandler) operator and tunneller.
12 It is agreed between the parties that none of the work crew removed the metal bridge from the arch form structures prior to moving the arch form structures.
13 However, as part of the preparations to move the arch form structure, the work crew established a five metre soft exclusion zone, which did not apply to those employees involved in the separation of the arch form structures, including the work crew. During preparations to move the arch form structures, the work crew intended to move one of the arch form structures about 100 millimetres to 200 millimetres away from the other arch form structure and arranged for chains to be connected between the bottom of the first arch form structures and the jib of a telehandler.
14 At the relevant time on 1 December 2011, Mr Meikle, one of the work crew, entered the cabin of the telehandler and commenced to reverse the telehandler away from the first arch form structure. In doing so he pulled the first arch form structures away from the other arch form structure. During this operation, Mr Pengelly and Mr Bambling stood outside the exclusion zone adjacent to the cabin of the telehandler to monitor the movement of the arch form structure. Mr Hogg stood inside the exclusion zone underneath the stationary arch form structure to monitor the movement of the first arch form structure as it was towed downhill along the Tunnel.
15 It was during this process, at 8 pm, that the metal bridge was dislodged from between the arch form structures, fell toward the ground and struck Mr Hogg in the head, causing him lacerations and injury.
16 The parties have reached agreement in relation to the following points:
on 1 December 2011 the Workplace was under the control of John Holland;
no formal risk assessment was completed by John Holland in respect of the metal bridge before installing and using the metal bridge between the arch form structures or at all;
the work crew were not provided with any information, instruction or training regarding the safe use or removal of the metal bridge;
the risk of actual injury arising from the metal bridge falling from the arch form structures only arose upon the movement of the arch form structures and only if the metal bridge was not first removed from the arch form structures;
it was necessary that the metal bridge be removed from the arch form structures if the arch form structures were to be moved safely;
there were reasonably practicable steps which could have been taken by John Holland which would have enabled the maintenance of a working environment, including the following systems of work that were safe for employees and without risk to their health:
o completing a revised formal risk assessment in respect of the arch form structures,
o implementing a safe system of work for the use and removal of the metal bridge by amending the relevant job safety and environmental analysis;
o providing information, training or instruction to its employees involved in activities related to the separation of the arch form structures, for example by having a specific meeting regarding the use and removal of the metal bridge and the risk of the metal bridge dropping if not removed.
17 Relevantly, the parties agree that:
Mr Hogg forgot the metal bridge was in place, thought reasonably that he was standing in a safe position whilst the work crew was moving the first arch form structure and faced the most significant risk of injury; and
Mr Bambling and Mr Pengelly were exposed to risk or injury from the metal bridge being dislodged if they were to enter inside the five metre exclusion zone whilst the work crew was moving the arch form structure, but accept that there is no evidence that Mr Bambling or Mr Pengelly entered, or intended to enter, the five metre exclusion zone at the time of the incident.
18 The parties also agree that that the incident was foreseeable but not specifically foreseen.
19 Comcare submitted, in summary, that pursuant to s 16(2) of the OHS Act, John Holland breached its obligation to take all reasonably practicable steps to protect the health and safety at work of its employees within the meaning of s 16(1) of the OHS Act.
20 Sub-section 16(1) and (2) of the OHS Act provides as follows:
16 Duties of employers in relation to their employees etc.
(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.
Submissions of Comcare
21 Pursuant to the Act, Comcare submits that John Holland failed to take the following reasonably practicable steps:
in relation to s 16(2)(a)(i) – to provide and maintain a working environment (including plant and systems of work that that is safe for the employer’s employees and without risk to their health;
in relation to s 16(2)(b)(i) – in relation to any workplace under the employer’s control, to ensure the workplace is safe for the employees and without risk to their health;
in relation to s 16(2)(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 of plant; and
in relation to s 16(2)(e) – to provide to the employees 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.
22 John Holland originally admitted to a contravention of s 16(1) of the OHS Act but made an ambit denial of the breach of the duties expressed in s 16(2) of the OHS Act, accepting instead limited admissions in respect of a single employee, namely Mr Hogg.
23 Comcare submitted that this limitation was inconsistent with the duty imposed on John Holland by the OHS Act, and relied upon observations of Spiegelman CJ in Thiess Pty Ltd and Hochtief AG v Industrial Court of New South Wales (2010) 205 IR 263 where his Honour said:
 In my opinion, the word “risks” in 8(2) also refers to the possibility of danger. The word “exposed” refers to a person who was sufficiently proximate to the source of the risk at the relevant time or times for that risk to possibly impinge upon his or her health or safety.
 It serves these objects better if the words “exposed to risks” in s 8 (2) are understood as extending to a person… who was sufficiently proximity to the source of a risk for the risk to come home, irrespective of the mechanism by which that could happen.
24 Comcare submitted that the issue therefore remained to be determined as to the culpability, rather than the liability, of John Holland. Comcare submitted that the following matters were relevant to determining an appropriate pecuniary penalty:
the respondent has had prior breaches of the Act;
there was potential for grave harm due to the weight of the object that fell. That potential for harm was not limited to a single worker;
a worker was in fact injured;
the potential for harm is exacerbated by the period the Platform was in use without appropriate safe system of work in place for its use and removal. These failures may be categorised as a failure to utilise an existing system, rather than a systemic failure;
the incident was foreseeable although not specifically foreseen;
the risk could have been avoided with relative ease;
the respondent has co-operated entirely with the applicant and its investigation; and
the respondent has adopted practices and procedures designed to fulfil its duties under the Act.
Submissions by John Holland
25 As John Holland now admits to a contravention of s 16(1) of the OHS Act in terms of the draft order tendered by Comcare, I understand that John Holland’s position has altered since the filing of its written submissions, to now reflect the terms of that draft order. Primarily, in oral submissions before me Mr Dixon SC for John Holland focussed on matters relating to the implementation and use of relevant workplace health and safety protocols at the Workplace prior to and following the incident. Mr Dixon submitted that there were mitigating systems in place for John Holland to ensure workplace health and safety of their employees. In particular I note the concession by John Holland that, in respect of occupational health and safety and this particular incident, there was an omission on the day, and matters could have done better.
26 In particular Mr Dixon took me to the affidavit of Mr Dean Cipolla, the John Holland Group General Manager – Knowledge Management and Business Improvement and Acting Group General Manager HSE, affirmed 2 April 2015. In that affidavit Mr Cipolla gave detailed evidence as to management of occupational health and safety in John Holland, including the specific construction method statement for arch lining in the Tunnel, workplace activity briefings, job safety and environmental analyses, and hazard reporting tools.
27 Mr Cipolla also gave detailed evidence concerning the aftermath of the incident wherein Mr Hogg was injured, including the engagement of a competent person to undertake a review of the hazards associated with the movement or repositioning of the metal arch form structure, the formation of an investigation team immediately after the incident to identify (inter alia) causes of the incident, the changes made by John Holland to occupational health and safety procedures following the incident, and policy changes improving safety at the Workplace.
28 In light of the fact that John Holland has admitted contravention of subs 16(1) of the OHS Act, and that an agreed position has been reached by the parties in respect of an appropriate order, it is the task of the Court to consider appropriate orders, including declarations, and a penalty which:
reflects the objective seriousness of the contravention;
gives effect to the objects of the Act; and
will maintain public confidence in the Act as a means of regulating workplace health and safety.
(cf Comcare v John Holland  FCA 1191.)
29 John Holland admits contravening subs 16(1) of the OHS Act, in terms of failing to take all reasonably practical steps to protect the health and safety at work of its employees, including Mr Hogg. The Court has a wide discretionary power under s 21 of the Federal Court Act 1976 (Cth) to make declarations.
30 In this case:
The proposed declaratory order relates to conduct of John Holland which contravenes the Act.
Matters relevant to the proposed declaration have been identified by the parties with precision.
I consider that it is in the public interest for Comcare to seek to have the order made, and for the Court to make that order.
There is a legal controversy between the parties, which the declaration resolves.
31 In my view it is appropriate that the Court makes the declaratory order of liability upon which the parties have agreed.
32 General principles informing the exercise of the Court’s discretion in respect of pecuniary penalties were outlined by Madgwick J in Comcare v Commonwealth of Australia (2007) 163 FCR 207, at :
(i) 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;
(ii) 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;
(iii) 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;
(iv) the gravity of the consequence of an accident does not 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;
(v) 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;
(vi) general deterrence and specific deterrence are particularly relevant factors in light of the objections and terms of the Act;
(vii) 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;
(viii) regard should be had to the levels of maximum penalty set by the legislature as indicative of the seriousness of the breach under consideration;
(ix) 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;
(x) 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.
33 These factors provide a useful foundation or starting point for an assessment of a civil pecuniary penalty (Comcare v Post Logistics Australasia Pty Ltd (2012) 207 FCR 178 at 202) and are routinely the subject of consideration in cases involving pecuniary penalties (for example Comcare v Transpacific Industries Pty Ltd  FCA 1420 at ; Comcare v John Holland Pty Ltd  FCA 1191; Comcare v Linfox Australia Pty Ltd  FCA 61).
34 Comcare argues however that the various factors for consideration in assessing a penalty for breach of the Act may have greater or lesser importance in any given case, depending on the various objective and subjective elements of the breach. The penalty assessment process cannot be reduced to an inflexible set of criteria: cf Comcare v Post Logistics at . In my view this submission is correct.
35 Before proceeding to consider an appropriate pecuniary penalty I note briefly the decision of the High Court in Barbaro v The Queen (2014) 88 ALJR 372, which restricts prosecutors in criminal proceedings in respect of submissions they may make on penalty. A question exists as to whether this case similarly affects submissions of an entity such as Comcare in relation to an appropriate penalty to be imposed on John Holland. This question to date remains unresolved, however the present state of the authority in this Court is that Barbaro does not prevent the Court from taking into account a regulator’s submissions on penalty.
36 In this case the parties submit that a pecuniary penalty in the amount of $110,000 is appropriate. Comparable cases have been drawn to my attention, namely:
Comcare v Linfox Australia Pty Ltd  FCA 61. That case involved a collision between a forklift and an employee whilst a container was being unloaded, where the employee suffered multiple facial fractures, a fractured jaw, disruption to supra-orbital nerve, teeth damage and severe facial lacerations. The factors in relation to penalty which were taken into account by the Court in this case included that, because the parties reached agreement on appropriate penalty, a four day hearing was saved; the respondent had conducted no risk assessment; the conduct was described as a “systemic failure”; and the Court acknowledged steps taken by the respondent following the incident. The penalty imposed in this case was $90,000.
Comcare v Australian Postal Corporation  FCA 530. That case involved a failure to implement documented procedures regarding the maintenance of postal delivery motorcycles. A different system was adopted by workers as matter of routine over a two month period. Whilst there was no injury, the factors in relation to penalty taken into account by the Court included that the incident was not a systemic failure at a national level there was a need for general and specific deterrence of similar conduct and the respondent was contrite and had cooperated with the investigation. The penalty imposed in this case was $95,000.
Comcare v Transpacific Industries Pty Ltd  FCA 1420. In that case a worker was exposed to a noxious substance which rendered him unconscious. The worker was washed down at the worksite and taken to hospital where he was examined but not admitted. The factors in relation to penalty taken into account by the Court included that the respondent admitted the breach; the risk ought to have been obvious; and the lack of risk assessment by the respondent. The penalty imposed in this case was $110,000.
Comcare v Post Logistics Australasia (2012) 207 FCR 178. In that case a worker’s toe was broken by a forklift. The Court found that there was an inadequate traffic management system, as well as insufficient instructions given to the worker. The factors in relation to penalty taken into account by the Court in that case included the need for general and specific deterrence; and that breach should attract substantive punishment such that employers will meet their obligations under the Act. The penalty imposed in this case was $120,000.
Comcare v Australian Postal Corporation  FCA 1533. In that case a forklift collided with a worker, due to the failure of the respondent to provide adequate instruction to workers or maintain documented procedures. The worker suffered a serious leg injury, such that his leg required amputation below the knee. Factors in respect of penalty taken into account by the Court included that the senior officers of the respondent were present in court and communicated genuine contrition to the Court; the risk was foreseeable and was described as a locationally-specific failure; and the Court considered that deterrence was necessary. The penalty imposed in that case was $160,000.
37 Comcare argues that the case before me is less serious than Comcare v Australian Postal Corporation  FCA 1533 where a penalty of $160,000 was imposed, but more serious than Comcare v Australian Postal Corporation  FCA 530 where the Court imposed a penalty of $95,000.
38 In my view it is appropriate to make an order for a pecuniary penalty in the amount of $110,000. In forming this view I take into account the following factors:
1. The parties have indicated to the Court, by agreement, their view of an appropriate penalty. In my view the fact of this agreement by the parties in these terms strongly supports an order in that form.
2. Taking into consideration similar fact situations as described in comparable cases, and the penalties imposed in those cases, $110,000 is a figure within the range of penalty which is appropriate for a contravention of this nature.
3. I consider that the amount of $110,000 is an adequate deterrent in the circumstances of this case.
4. Mr Hogg was actually injured on the head as a result of a heavy object falling on him. This is a serious matter, which could have had an even more serious outcome than it did.
5. In the circumstances of this case, and in light of the agreed facts, it appears that this event was foreseeable but not foreseen.
6. I am not satisfied that, on the facts of this case, there was a systemic failure by an employer to appropriately address a known or foreseeable risk. I accept the evidence of Mr Cipolla concerning the extensive occupational health and safety procedures and policies implemented by John Holland in the Workplace.
7. John Holland acted immediately to implement improved safety procedures as a result of the incident, and following the investigation into the incident. In my view this is a mitigating factor in John Holland’s favour.
8. Through its senior officers, John Holland has expressed contrition in relation to the incident.
9. The co-operation of John Holland with Comcare in reaching agreement as to appropriate orders is a mitigating factor in John Holland’s favour, in that this agreement has obviated the need for a trial with the associated impact on Court resources as well as those of the parties: cf Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383.
39 Finally, while no estimate was put to me in relation to the costs of Comcare, I consider that costs ought follow the event and that it is appropriate to award costs in this matter to Comcare, to be taxed if not agreed.