SafeWork NSW v Opcon Plumbing Pty Ltd; SafeWork NSW v Annous
Keywords: Due Diligence; Company Officers
I have written before about the prosecution of Company Officers under WHS legislation, and how, in my view, it is not achieving the purpose many envisaged when it was touted as one of the great achievements of the WHS legislation. You can read some of my earlier thought here: Due Diligence prosecutions under WHS Legislation (and other fairy stories); Is this really what due diligence was designed for?
The prosecution of Company Officers for health and safety offences in Australia has always been directed at small businesses. Company Officers in this context nearly always have day-to-day involvement in the relevant work and are often performing or directing the work which was happening when the accident occurred. When these small business owners are prosecuted, they are usually punished twice – once as an individual, and once because when their business is fined, it diminishes and sometimes destroys their sole source of income.
Most people envisaged due diligence as a tool against “corporate” Company Officers. Technocrats who are removed from the business' day-to-day, front line work. Managers who suffer no personal detriment when the company they work for is fined. This vision is far from reality, as the Opcon Plumbing case demonstrates.
On 31 January 2016, Mr Annous, the sole director and company secretary of Opcon was working on a roof with other workers, including Mr Davey. Mr Davey fell through the roof and dies. It was conceded in the trial that he was not wearing fall protection.
While Opcon Plumbing had all the paper-based trappings of safety management – including a generic safe work method statement and tool box talks – the bureaucracy was not applied in practice and the court said there were a number of simple remedial measures which could have been put in place to prevent the incident.
Both Opcon and Mr Annous were prosecuted.
Opcon and Mr Annous pleaded guilty to the charges. The company was fined $75,000 and Mr Annous $7,500. Opcon also had to pay the prosecution costs of $35,000.
There is no doubt the case was serious and prosecution could be justified, at least in the case of the company, but what possible benefits could flow from prosecuting Mr Annous as a Company Officer?
The investigation into the incident found:
Opcon was a very small business with four or five employees who were very close and upset by the incident.
Mr Davey and Mr Annous were friends. Their families were close and they often socialised at dinners and functions. Mr Annous considered Mr Davey to be more of a family member than a friend.
Mr Annous stayed in contact with Mr Davey’s wife and helped her to finish the renovations to her house.
Between 2013 and 2016, the highest profit the company made was $13,000 and Mr Annous’ income varied between $48,819 and $55,600.
It is impossible to understand what social benefit arises, or how workplace safety and health is advanced in any way, from the decision to prosecute Mr Annous.
Since the introduction of WHS and the oft touted due diligence provisions, all proceedings against Company Officers have been against small business owners, and this is entirely consistent with the history of management prosecutions in Australia.
Is this what we expected from the due diligence provisions? I cannot help but think not.
Since WHS was introduced, there have been numerous fatality events in larger companies. Are we really to believe that in all those cases, Company Officers were able to effectively demonstrate due diligence, or is it more likely no one ever asked?
Is due diligence really about executive accountability, or just the path of least resistance?
You can read more articles in the Safety Case(s) series HERE.
This article represents a general discussion about legal principles. It is not specific advice, and you should seek your own legal advice in relation to your specific circumstances.