In a District Court decision in Brisbane last week, convictions were handed down to the entire board of directors after the death of a worker.
No matter what side of the Tasman you live on, the impact of this decision will be widespread and highlights the obligation for directors to actively manage their workplace health and safety, irrespective of the company size.
During the incident at Brisbane Auto Recycling Pty Ltd, a worker was struck by a forklift in the company’s wrecking yard, and subsequently died from his injuries. Workplace safety procedures were minimal and there had been an absence of any realistic investment in establishing safety systems. A safety consultant had described the system as, “no more than mildly inconvenient”. There was a reliance on verbal safety instructions and the forklift operator was unlicensed and unskilled.
It was established that a traffic management plan had not existed for a long period of time. As such, the failure to ensure the safety of workers and visitors to the site was regarded as a serious breach. The Court stated, "The defendants had no safety systems in place, in particular there was no traffic management plan”.
Subsequently, the two directors of the Queensland company were convicted and sentenced to ten months’ imprisonment, wholly suspended for 20 months. Their company was convicted of industrial manslaughter and fined three million dollars.
The directors were two young men, both married with young children. They had built up a successful business employing eight staff. But it appears a reluctance to invest in safety systems or to seek professional advice played a major part in this tragedy.
The New Zealand legislation regards a director as an “officer” of the company. Section 44 of the Health and Safety at Work Act 2015 states that as an officer, you must exercise due diligence to ensure the company complies with its duty and obligations.
In practical terms, due diligence includes taking reasonable steps to:
It is critical directors are actively involved in health and safety. Even if you have someone responsible for administering your health and safety programs, you must still check and verify that what you are being told is correct. You must “check the checker”.
For many businesses, COVID-19 has shifted the focus to survival and rebuilding. Priorities have changed, and things can get forgotten. But this decision highlights for directors and boards, health and safety cannot be one of these. It must remain top of mind and you must be satisfied that you have done everything required of you under the Act.
It does not matter what anyone else has done. You, as a Director, have a personal liability. The risks you face include criminal prosecution, so you must take personal responsibility and ensure your health and safety practises are adequate and working.
If you have any doubts about your obligations, your role as a director, your liabilities as a director or need help with governance, contact your local Crowe office. We have experienced commercial directors throughout the country who can help and guide you.
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June 2020
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