On 10 June 2020, the Work Health and Safety Amendment (Review) Act 2020 (NSW) (the Act) came into effect, introducing a number of significant reforms to the Work Health and Safety Act 2011 No 10 (NSW) (WHS Act). The changes include an expansion of gross negligence, prohibition of insurance contract indemnities, and increases in fines for WHS breaches.
The new laws are intended to implement some of the recommendations from the 2018 Review of the Model WHS laws by Marie Boland, who was appointed as independent reviewer by Safe Work Australia.
Despite the recommendation by Marie Boland that a separate offence for industrial manslaughter should be introduced, the Bill does not create such an offence. The Bill does however insert a note that the death of a person at work may also constitute manslaughter under the Crimes Act 1900 (NSW) in certain circumstances. Currently, a separate offence for industrial manslaughter exists in a number of other state and territory jurisdictions including the ACT, Northern Territory, Queensland, and Victoria.
Some of the key changes to the WHS Act are explained below.
Expansion of Category 1 Offence – Gross Negligence
The scope of Category 1 Offences (the most serious category) has been expanded under the WHS Act to include any businesses who wrongly engage in grossly negligent conduct that exposes a worker to a risk of death, serious injury or illness. This is in addition to the existing test, which requires a business to have been “reckless” as to the risk of death, serious injury or illness. The ‘gross negligence’ standard creates a lower threshold test than the previous “recklessness” test.
It is expected that the amendment will make it easier to prosecute Category 1 offences for the most serious safety shortcomings.
Prohibition of Insurance Arrangements
A new provision has been inserted into the WHS Act which prohibits insurers and companies from entering into insurance contracts that indemnify the companies from monetary penalties under the WHS Act. It is now an offence to enter into such contracts. Significant penalties apply for breaches of these sections, and officers of a body corporate can be held personally accountable for this offence.
Increase in Fines for WHS Breaches/ Change to unit system
The new Act implements a penalty unit system, replacing pre-determined monetary amounts for breaches of the Work Health and Safety Regulation 2017 (NSW). For FY20, the value of a unit is $100 which will be adjusted each year in accordance with the consumer price index (CPI). This unit system will cover any offences occurring after 10 June 2020. The Act also increases fines arising from the WHS Act and the Regulation overall.
The takeaway for employers
The changes mean that employers in NSW must ensure that they have comprehensive workplace health and safety policies and procedures in place, and crucially, ensure that they are followed and communicated to workers.
Senior management must ensure that their organisation is complying with its WHS duties, as this is necessary to avoid exposure to criminal liability with respect to their duty as officers. Insurers will no longer be able to cover WHS fines, placing the financial burden on companies and their officers.