Prepare for much larger fines, warn lawyers

The first case under the new Health and Safety at Work Act ended with a six-figure fine for the employer – now, lawyers are saying it’s indicative of what’s to come.

BY HRD 30 Aug 2017

The first case under the new Health and Safety at Work Act came to a close last week, with the culpable business receiving a five-figure fine – now, a number of top lawyers are saying the result is indicative of what’s to come.

“The decision gives some initial guidance to businesses and other duty holders about just how much bigger the penalties will be for breaching the HSW Act compared to the former Health and Safety in Employment Act 1992,” said Grant Nicholson, a partner with Kensington Swan.

Brian Nathan, a partner at Duncan Cotterill, echoed the sentiments.

“This decision has resulted in a large increase in the level of fines for breaches of the HSW Act,” he said. “As insurance cover cannot be obtained for fines, every PCBU [person conducting a business or undertaking] should be aware of the potential effect on their business of breaching their health and safety obligations.”

Budget Plastics – the company at the centre of the case – pleaded guilty to a single charge under the HSWA after one of its employees trapped his hand in machinery.

Most of the victim’s hand had to be amputated following the accident and his employer was also ordered to pay compensation of $37,000 for emotional harm.

“The company identified issues with the guarding on this machine six weeks before the incident, and yet at the time of the incident, nothing had been done to guard, or isolate the machine,” said Brett Murray, WorkSafe’s general manager of operations and specialist services.

“The failure of the Budget Plastics Ltd to take action to this known risk left their employee with a life-long injury,” he continued. “Sadly, it could have been avoided by acting quickly and guarding the machine properly.”

MinterEllisonRuddWatts also commented on the case, identifying five notable features.

It shows that the court will impose higher fines moving forward, which reflects the five-fold increase in maximum fines available under the HSW Act
The District Court recognised that it will be up to the appellate courts to set sentencing guidelines
The court observed that although the Australian Model Work Health and Safety Act was drawn upon when developing the Act, it does not follow that sentencing will be similar in this jurisdiction
The courts will continue to take into account the financial capacity of the offender in setting the fine.
The court took the step of imposing costs against the defendant even though it had pleaded guilty and had been cooperative throughout the investigation.