Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Robert Littley v Rick Damelian Pty Ltd [2003] NSWIRComm 121 PROSECUTOR: Inspector Robert Littley PARTIES : DEFENDANT: Rick Damelian Pty Ltd FILE NUMBER: IRC4153 of 2002 CORAM: Kavanagh J CATCHWORDS : Section 15(1) offence under the Occupational Health and Safety Act 1983 - failure to have in place an appropriate Occupational Health and Safety policy and programme for maintenance of faulty electrical equipment involving tagging and isolation procedures - failure to properly instruct and train employee - employee attempts maintenance on electrical equipment - employee not qualified to perform electrical repair work - equipment not properly maintained - employee electrocuted - subjective features considered including full re-design of company commitment, policy and programme for safe working - penalty LEGISLATION CITED : Occupational Health and Safety Act 1983 s15(1) Crimes (Sentencing Procedure) Act 1999 s22 Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 Tyler v Sydney Electricity (1993) 47 IR 1 Inspector Hannah v Wonar Pty Limited (unreported, Fisher CJ, Glynn, Cullen JJ, CT90/1214, 30 June 1992) Haynes v James Glass and Aluminium Pty Limited (unreported, Fisher CJ, CT91/772-775, 20 May 1994) WorkCover Authority of NSW (Insp Callaghan) v Saunders Constructions Pty Ltd (unreported, Maidment J, CT1062 of 1993, 26 November 1993) Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 CASES CITED : Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610, (1999-2000) 99 IR 29 Cameron v The Queen (2002) 187 ALR 65 R v Thomson, R v Houlton (1999-2000) 49 NSWLR 383, (2000) 115 A Crim R 104 R v Sharma (2002) 54 NSWLR 300 WorkCover Authority v CT Plumping Pty Limited (unreported, Fisher P, CT522 of 1991, 16 December 1991) WorkCover Authority of NSW (Insp Ankucic) v McDonalds Australia Limited (2000) 95 IR 383 Corinthian Industries (Sydney) Pty Limited v WorkCover Authority of NSW (Insp Wilson) (2000) 99 IR 159 HEARING DATES: 04/07/2003 DATE OF JUDGMENT: 04/17/2003 PROSECUTOR: Mr P.M. Skinner of counsel Solicitors: Ms H. Cameron WorkCover Authority of NSW LEGAL REPRESENTATIVES: DEFENDANT: Mr T.M. Rowles of counsel Solicitors: Mr R. Hassall Sparke Helmore JUDGMENT: - 8 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: KAVANAGH J Date : Thursday 17 April 2003 IRC4153 of 2002 INSPECTOR ROBERT LESLIE LITTLEY v RICK DAMELIAN PTY LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2003] NSWIRComm 121 1 This prosecution is brought by Inspector Littley of the WorkCover Authority of NSW against Rick Damelian Pty Limited (the defendant company) under s15(1) of the Occupational Health and Safety Act 1983 (the Act). It is alleged the defendant did fail: to ensure the health, safety and welfare at work of all its employees and, in particular, Jose Candido Da Palma Rosa ('the deceased'), contrary to s15(1) of the Occupational Health and Safety Act 1983 in that the defendant failed: (a) to adequately maintain plant, being, the spot welder, that was safe and without risks to health; (b) to provide an adequate system in respect of tagging and isolation for maintenance/repair work undertaken on the spot welder that was safe and without risk to health of persons in its employment; (c) to provide such information, instruction and training - in particular, information, instruction and training as to tagging and isolation procedures for the spot welder; and information, instruction and training as to repair of the spot welder - as may have been necessary to ensure the health and safety at work of persons in its employment. 2 Mr P.M. Skinner of counsel appeared for the prosecution. Mr T.M. Rowles of counsel appeared for the defendant. The prosecutor tendered a number of photographs of the site and photographs of the equipment involved in the breach. Each bundle of photographs tendered related to the WorkCover Report, or the Police Report or the Test Safe Findings. 3 The defendant, through Mr Rowles, tendered an affidavit of Mr Ron Brien, Director, Administration and Legal Affairs, of the defendant company. Attached to Mr Brien's affidavit was a comprehensive collation of relevant documents including the pre-existing Safety Policy Statement of the company and Mr Da Palma Rosa's personal file which revealed his induction training. Documentation relating to a revised safety policy and procedures put in place following this incident were also attached. The latter included information about new management structures and the accountability programme adopted. Retraining and training procedures were elucidated and procedures for the identification of major hazards, including electrical hazards were defined. All relevant documents from the company's now comprehensive management manual were tendered. 4 As to the breach it is agreed: 2. On Tuesday 27 February 2001 and at all material times the Defendant was an employer within the meaning of section 15(1) of the Occupational Health and Safety Act 1983. 3. On 27 February 2001 and at all material times Jose Candido Da Palma Rosa ("Mr Da Palma Rosa") was an employee of the Defendant. Mr Da Palma Rosa was born on 10 December 1954 and commenced employment with the Defendant on 1 September 1994. 4. Prior to commencing his employment with the Defendant, Mr Da Palma Rosa worked as an apprentice panelbeater, progressing through the grades of assistant panelbeater, 3rd class smash repairs panelbeater, 2nd class smash repairs panelbeater and 1st class smash repairs panelbeater. 5. On 30 September 1993 Mr Da Palma Rosa obtained a Trade Certificate in the classification of Panel Beater. 6. Mr Da Palma Rosa was employed as a first class panel beater at the Defendant's premises known as Rick Damelian Paint and Body Shop at 39-45 Parramatta Road, Five Dock, New South Wales. At all material times Mr Da Palma Rosa was "at work" within the meaning of section 15(1) of the Occupational Health and Safety Act 1983. There were variously between five and nineteen employees of the Defendant at this location. 7. In the course of his normal duties as a panel beater in the employment of the Defendant, on 27 February 2002 [sic], Mr Da Palma Rosa was undertaking panel repair of an Audi motor vehicle. That job required the use of an ARO spot welding machine Type T(D112) serial number N(9032185) ("the spot welder") provided by the Defendant. 8. The spot welder had been owned by the Defendant and used at the premises from the time the Defendant purchased the business in about 1988. 9. The spot welder was powered by electricity and ran at 415 volts. It was connected by a flexible cord to a mains electricity power source. 10. On the morning of 27 February 2001 the spot welder was used by a fellow employee of Mr Da Palma Rosa, George Zorbalas, a trades person panelbeater. The spot welder ceased to work, and Mr Zorbalas informed Mr Da Palma Rosa of that. Mr Da Palma Rosa stated that he would have a look at it. 11. At some time prior to approximately 2:15pm on that day Mr Da Palma Rosa was attempting to repair the spot welder. 12. As part of his attempted repairs to the spot welder Mr Da Palma Rosa removed the cover to the control box of the spot welder. Mr Da Palma Rosa did not isolate the machine from the power source. 13. At approximately 2:15pm on 27 February 2001 Mr Da Palma Rosa received an electric shock when he handled the control box of the spot welder. 14. Mr Zorbalas saw Mr Da Palma Rosa receive the electric shock and immediately attempted to release Mr Da Palma Rosa's grip from the live control box, but received an electric shock himself when he touched Mr Da Palma Rosa. Mr Zorbalas initially was unable to locate the relevant power source but then found the power source and turned off power to the spot welder. 15. Mr Da Palma Rosa was conveyed by ambulance to Royal Prince Alfred Hospital and life was pronounced extinct at 3:15pm on 27 February 2001. 16. Mr Da Palma Rosa had no formal qualifications as an electrician as relevant to his attempts to repair the spot-welder. He had not been informed, instructed or trained to undertake the attempted repair to the spot-welder on 27 February 2001 that led to his electrocution. 17. Mr Da Palma Rosa's fellow workers, Enzo D'Eusanio and James Esposito, had seen Mr Da Palma Rosa, prior to this incident, repair the spot-welder by re-wiring it at the back of the arms where the cable fitted into the spot welding arms. Neither employee had ever observed Mr Da Palma Rosa removing the cover of the spot-welder to repair it. 18. Mr D'Eusanio, in reply to a question from WorkCover during his interview on 17 April 2001 regarding why he didn't give the spot-welder to his boss if it was playing up, stated that "If it is something that we can fix we fix it". Mr Esposito, in reply to a question from WorkCover during his interview on 28 March 2001 regarding maintenance or repair of the spot-welder, stated "I fixed it once". Neither Mr D'Eusanio nor Mr Esposito had any formal qualifications as an electrician relevant to their repairs to the spot-welder, nor had they been informed, instructed or trained to undertake repairs to the spot-welder. 19. Australian Standard 3760, 'In-Service Safety Inspection and Testing of Electrical Equipment', specifies procedures and criteria for the safety inspection and testing of electrical equipment connected to power sources by flexible cord. It provides that such electrical equipment which is used in factories or workshops should be inspected for repair at six-monthly intervals by a competent person who has acquired such competency through training, qualification, experience or a combination of same. 20. The Defendant is Quality Assurance accredited under ISO 9002 which requires the keeping of maintenance service records for all equipment. The Equipment Maintenance Asset Record in relation to the spot welder was created in March 1996. That document, next to the section dealing with "Record Initial Data", states that the frequency of maintenance checks would be "when required". From that document it appears there was no recorded routine maintenance of the spot welder. 21. Mr Da Palma Rosa did not use any tagging or isolation procedure in relation to the spot-welder prior to commencing repairs to it. Neither Mr Da Palma Rosa nor any of his fellow employees at the Paint & Body Shop were instructed or trained as to any tagging or isolation procedures applicable to the repairs he commenced to do to the spot-welder. 22. Upon examination by an expert retained by the WorkCover Authority, Mr W Dunn, Engineering Project Officer, Electrical Testing, TestSafe Australia, the spot-welder was observed to be in a 'poor state of maintenance'. In his report to WorkCover Mr Dunn made the following conclusion: There was no specific thing in the condition of the machine that by itself could present a definite cause of electric shock. There were several conditions noted that might cause the machine to function intermittently. The nature of this unreliable operation may then lead the operator to dismantle the machine and thereby be exposed to contact with live parts. The total of the conditions noted is a clear indication of lack of proper maintenance and repair over a considerable period. Many of the conditions could only be the result of unskilled repair and expediency . 5 The defendant entered a plea of guilty to the charge. 6 The court must consider the nature and quality, that is, the gravity of the offence. As was held in Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 (at 474): . . . in our view it is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the 'true measure of penalty lies in the nature and quality of the offence' . . . The Full Bench further stated (at 474): It has been observed on a number of occasions that subjective factors which mitigate the seriousness of the offence or exculpate the accused must be secondary to consideration of the nature and quality of the offence. Evidence revealed the spot welder, that is the relevant plant, was not properly maintained by the defendant company. Further, Mr Da Palma Rosa was not properly instructed or, if instructed, not properly trained sufficient to not volunteer to perform maintenance work on electrical plant which work he was not qualified to perform. The combined effect of these failures created the risk to safety. While the gravity of the consequences of a breach does not of itself dictate the seriousness of the offence, the gravity or otherwise of the potential risk to safety flowing from a breach is relevant as a measure of the gravity of the breach and the culpability of the defendant (see Tyler v Sydney Electricity (1993) 47 IR 1 at 5). The occurrence of death or serious injury can manifest the degree of seriousness of the relevant detriment to safety. As Wright J, President said in Ferguson v Nelmac (1999) 92 IR 188 (at 204): Where a fatal injury has occurred, that is a factor to be taken into account and is often of itself reflective of an offence the nature and quality of which is serious. The two elements of the breach created a risk to safety which was realised with the death of Mr Da Palma Rosa and is indicative of the seriousness of the offence. 7 It is a serious offence where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken even though such measures were available and feasible (see Inspector Hannah v Wonar Pty Limited (unreported, Fisher CJ, Glynn and Cullen JJ, CT90/1214, 30 June 1992 at 9; Lawrenson Diecasting at 476). There was not in place a system of work for the tagging and isolation procedures that must be followed when there is a need for the maintenance of electrical plant. Tagging and isolation are the basic steps followed to avoid any risk to safety in the conduct of any maintenance work on electrical equipment. Further appropriate training should have ensured an unqualified employee would not attempt to perform tasks which required specific skills which he did not possess. The admission from a fellow worker as to the attitude at the work site - "if its broken we fix it" - was indicative of the lack of appropriate procedures and training. Further, any educative process for employees will involve awareness of risks when working on electrical equipment. The risk in the circumstances arising from the lack of procedures and training was therefore foreseeable. Appropriate measures were not taken even though such measures were available and feasible. 8 While there was a stated policy by the defendant company of commitment to "Quality Assurance and Corporate Health and Safety", there was not in place any defined Work Methods for individual tasks; no procedures for the identification of hazards nor any assessment of risk in the performance of each task. The lack of procedure for safe working exposed a willing employee to a risk to his safety. Even if I accept the defendant's submission: There had been at the very least informal statements to the workers in the panel and paint shop to refer required faulty equipment to the general management for review as to whether they required repair and replacement. Such an attitude had to be reinforced with the training of employees and the appropriate system in place for maintenance. 9 I find this offence most serious. 10 In consideration of penalty, a number of subjective features have been placed before the Commission in Court Session for consideration. In Lawrenson Diecasting the Full Bench cited (at 474) with approval, the passage in the judgment of Fisher CJ in Haynes v James Glass and Aluminium Pty Limited (unreported, CT91/772-775, 20 May 1994) where his Honour said: . . . While previous good industrial citizenship and the absence of prior convictions are proper considerations, their importance lies well behind the two primary aspects of the matter, namely the nature and quality of the offence and the clear policy of the Act in relation to the establishment of safe standards and the protection of the workforce. 11 I am satisfied the defendant has expressed sincere contrition and this has been reflected in the concern it has shown to the deceased's family including the financial assistance provided by them to the family immediately after their employee's death. 12 The defendant had in place prior to the incident only a policy statement reflecting its Quality Assurance and Corporate Health and Safety commitment. An analysis of this statement reveals it was directed towards ensuring, as a matter of policy, there was safe equipment and support for, though no written evidence of, defined systems of work. However, much more is needed than a written statement and occasional warnings to ensure safe working. While the defendant as a proactive measure conducted an induction training course for all employees when they were hired, this procedure could only be viewed as a very basic pre-existing occupational health and safety step and commitment. The defendant company, however, has taken significant steps to re-address the lack of safety policy and procedures revealed following this breach. They have not presented ad hoc responses to these issues but rather addressed the systemic problems identified within their workplace. The re-invigorated commitment to safe working is demonstrated by the following actions: ( i) The formation of a Sub-Committee dealing with OHS at Board level. (ii) The provision of a training session on risk management to the Defendant's management in June 2001. (iii) The retention of an independent expert to review the Defendant's OHS policies and procedures. (iv) The introduction of a new Occupational Health and Safety Management System in October 2001. (v) The formation of an OHS Committee in October 2001 and meetings approximately 6 weekly since then. (vi) Improved training resulting in induction training provided by way of both group induction and local inductions and refresher training. (vii) The seeking, and subsequent approval, of certification by WorkCover under its Premium Discount Scheme. (viii) The commitment to obtaining Quality Assurance for the Defendant's Occupational Health and Management System, placing it at the forefront of its industry in this regard. (ix) Newsletters to staff advising of OHS issues. 13 The court is persuaded the defendant's endeavours to review and implement a revised occupational health and safety management system demonstrates a new and significant commitment to safe working. I am persuaded and accept the submissions of the defendant that it has "learnt from the mistakes of the past." However the words of Maidment J in WorkCover Authority of NSW (Inspector Callaghan) v Saunders Constructions Pty Ltd (unreported decision, CT1062 of 1993, 26 November 1993) (at 7) are apposite in the circumstances: Commendable though it is to introduce appropriate occupational health and safety measures after the event it needs to be remembered that the legislation is not directed at ex post facto measures, it requires positive preventative steps being taken to ensure that workers are afforded safe working environments irrespective of their own laxities. 14 A level of deterrence must be factored into the consideration as to penalty (see Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388 and Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610; (1999-2000) 99 IR 29 [at 74]. As to specific deterrence the above refined procedures are taken into account as well as the significant financial imperative met by the defendant in implementing these changes. However, general deterrence considerations must allow the penalty to reflect the serious nature of the breach. 15 The history of the plea suggests although the first summons was issued on 17 July 2002, a plea of not guilty was entered. The amended summons was not issued until 25 March 2003 to which a plea of guilty was entered on the same day. It is submitted the judgment of the High Court in Cameron v The Queen (2002) 187 ALR 65 (published 24 February 2002) affects the guideline judgment of R v Thomson; R v Houlton (1999-2000) 49 NSWLR 383; and (2000) 115 A Crim R 104. In Thomson, the Court of Criminal Appeal held the full benefit and discount for the utilitarian value of an early plea of guilty should be restricted to pleas entered at the earliest opportunity and should rarely be given after a matter has been set down for trial. In Cameron, the High Court held when a defendant accepts responsibility for a crime and shows a willingness to facilitate the course of justice, the court in the assessment of the value of such a circumstance must consider: . . . whether the plea was entered at the first reasonable opportunity. The effect of Cameron on the guideline judgment in Thomson was considered by the Court of Criminal Appeal in R v Sharma (2002) 54 NSWLR 300. The court held the reasoning in Cameron was not applicable in New South Wales because the common law principles enunciated there have been modified by statute, namely s22 of the Crimes (Sentencing Procedure) Act 1999, which renders it mandatory a sentencing judge take into account both "the fact" of the plea of guilty and "when" it was made. Given the fact of the plea and the fact the matter was set down for hearing within two to three weeks of the hearing date, I consider it appropriate for the utilitarian value of the plea to reflect in a discount of 20 per cent. 16 It is agreed the defendant fully co-operated at all times with the WorkCover Authority in its investigation. 17 The industrial record and corporate character of the company is also a consideration. The defendant has operated in the car dealership/maintenance industry since 1983 and has had no prior breaches of the Act recorded against it. The defendant employs a total of 190 staff at four locations within New South Wales. This must be perceived as a large workforce. The defendant operates in an industry where there is some risk given the nature of the duties involved in car repair and maintenance and the defendant has operated in this area for a considerable period of time. 18 Placed before the court is evidence of the corporate character of the defendant company. Aside from providing significant work within the communities in which it operates, the company since the 1980s, has supported a number of community service programmes. It makes contributions of both cash and kind to needy groups within the State of New South Wales including the Autism Association where its commitment is of a significant financial nature. A director, Mr Damelian, through whom this company operates, gives active service to the Australian Red Cross in New South Wales as a member of its Divisional Council, the Executive Committee and as a member of its Fund Raising Advisory Committee. The company has recorded donations of over $1,000,000.00 in its support for cultural, artistic and community sport groups. Its corporate character can only be viewed as excellent (see WorkCover Authority v CT Plumping Pty Limited (Fisher CJ, CT522 of 1991, 16 December 1991), WorkCover Authority of NSW (Insp Ankucic) v McDonalds Australia Limited (2000) 95 IR 383, Corinthian Industries (Sydney) Pty Limited v WorkCover Authority of NSW (Insp Wilson) (2000) 99 IR 159 at [17]). 19 I take into account the objective features of the breach. The defendant failed to adequately maintain the spot welder, failed to provide a system of tagging and isolation needed for safe maintenance work on electrical equipment and failed to properly inform, instruct and train its employees. It was a serious offence. However, the subjective features of the breach do allow for some mitigation of penalty. I have allowed a 20 per cent discount for the utilitarian value of the plea. I allow a further discount in mitigation of penalty for the above subjective matters addressed. The maximum penalty under the Act at the date of the offence is $550,000.00. 20 I find the defendant guilty. 21 The defendant is fined in the sum of $180,000 with a moiety to the WorkCover Authority. 22 The defendant is to pay the prosecutor's costs. The parties have leave to re-list as to costs. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.