Industrial Relations Commission of New South Wales in Court Session CITATION: Inspector Peter Chamberlain v Proform Systems Pty Limited [2005] NSWIRComm 403 Prosecutor Inspector Peter Chamberlain PARTIES: Defendant Proform Systems Pty Limited (ACN 003 488 239) FILE NUMBER(S): 3844 of 2003 CORAM: Backman J CATCHWORDS: Occupational Health and Safety - sentencing of corporate defendant under s 15(1) of the Occupational Health and Safety Act 1983 - approach to sentencing considered - maximum penalty - systems of work - obvious and foreseeable risk to safety - simple measures available to obviate the risk - consequences of the breach - general and specific deterrence - absence of prior convictions - early plea of guilty - contrition and remorse - cooperation - penalty - orders - costs. Crimes (Sentencing Procedure) Act 1999 LEGISLATION CITED: Occupational Health and Safety Act 1983 Capral Aluminium Ltd v WorkCover Authority of New South Wales (Insp Mayo-Ramsay) (2000) 49 NSWLR 610, 99 IR 29 Department of Mineral Resources (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 Inspector Stephen Charles v Port Kembla Copper Pty Limited [2005] NSWIRComm 54 Inspector Yeung v Howie Herring & Forsyth Pty Limited & Anor [2005] NSWIRComm 266 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 CASES CITED: Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 Markarian v The Queen (2005) 79 ALJR 1048, 215 ALR 213 R v Thompson, R v Houlton (2000) 49 NSWLR 383, 115 A Crim R 104 Winchester (1992) 50 A Crim R 345 WorkCover NSW (Inspector Yeung) v Thiess Pty Ltd (No 2) [2004] NSWIRComm 96 HEARING DATES: 03/07/2005 DATE OF JUDGMENT: 11/04/2005 Prosecutor Mr M. Cahill, of counsel Solicitor Phillips Fox LEGAL REPRESENTATIVES: Defendant Mr J. Pearce, of counsel Solicitor McCulloch & Buggy Solicitors JUDGMENT: - 12 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Backman J Friday, 4 November 2005 Matter No IRC 3844 of 2004 Inspector Peter Chamberlain v Proform Systems Pty Limited Prosecution under s 15(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2005] NSWIRComm 403 1 Proform Systems Pty Limited (the defendant) has pleaded guilty to an offence under s 15(1) of the Occupational Health and Safety Act 1983 (the Act). The charge was brought by way of an amended application for order filed in Court on 7 March 2005. At that time the Court was informed that the prosecutor was not proceeding against a related entity, Dolso Constructions Pty Limited because the employees of that corporation had been transferred to the defendant corporation, sometime after March 2001. 2 The charge under s 15(1) of the Act alleges a failure on 16 July 2001 to ensure the health, safety and welfare at work of its employees, in particular Branko Kos. The offence is said to have been committed at the ABC Sydney Accommodation Project, 700 Harris Street, Ultimo (the ABC Sydney premises). The defendant's failure is particularised in the amended application for order in the following terms: 1.3 The Defendant failed to implement and maintain a system of work that was safe and without risk to health and safety of its employees working in stripping and clearing of formwork in the lift shaft on the premises. In the alternative the Defendant did not follow a safe system of work in the dismantling of formwork in the lift shaft. 1.4 The Defendant failed to implement and maintain a safe system of work to identify the existence of penetrations at the premises. In the alternative the Defendant did not follow a safe system of work to identify the existence of penetrations at the premises. 1.5 The Defendant failed to implement and maintain a safe system of work to ensure that penetrations were adequately secured on the premises. 1.6 The Defendant failed to adequately instruct, train and supervise its employees at the premises, including supervisor training in risk management, to ensure that penetrations were adequately secured and maintained as adequately secured. 1.7 The Defendant failed to identify or mark the existence of the penetration. Factual background 3 The defendant supplies to, and erects formwork for, various industrial and commercial construction sites. At the time of the offence it employed about 105 employees, 20 of whom were labourers, 80 of whom were formwork carpenters and 5 of whom worked in the office and administration. The defendant contracted with Leighton Contractors to supply, erect and remove formwork at the ABC Sydney premises. Mr Kos was employed there by the defendant as a formwork labourer. On 16 July 2001 he was in the process of dismantling and clearing falsework and formwork in goods lift shaft No 5. Formwork is apparently plywood used as a mould into which concrete is poured. Falsework is the support system for the formwork. It is used typically to provide a platform upon which employees work. Lift shafts consist of both formwork and falsework. The latter is erected to provide the work platform from which the employees erect the formwork for the walls of the lift shaft. The work platforms in the lift shafts contain a section in the middle which is open in order for a ladder to be used by the workers when travelling from floor to floor. 4 At around 2.00pm during the course of his work on 16 July 2001 Mr Kos lifted a piece of plywood measuring approximately 1800mm x 1200mm that was covering an opening or penetration approximately 600mm x 600mm. He fell some 5.4 metres through the penetration. As a result of the fall he sustained a comminuted fracture to his left forearm and injuries to his vertebrae. 5 On the day of the offence a WorkCover Inspector, Inspector Neill Bourne, attended the premises and made a number of observations which were included in a document entitled "Factual Inspection". He observed that the piece of plywood which was removed by Mr Kos was not fixed or otherwise secured to the first floor level inside the shaft, and, that it had white paint around the edges. He also observed that the distance between the first floor deck on which Mr Kos had been working and the decking below was approximately 5.4 metres. Prosecutor's evidence 6 At the sentence proceedings, the prosecutor represented by Mr Cahill of counsel tendered an agreed statement of facts which annexed a series of five photographs taken by Inspector Bourne on 16 July 2001 shortly after the accident and the Inspector's Factual Inspection document. 7 According to the agreed statement of facts, on the day of the offence, in addition to the facts recited above, there was no fencing or other means of securing for the safety of persons working at a height in excess of 1.8 metres. Nor was there any marking or signage which warned of the existence of the penetration. There was no adequate inspection of the lift shaft before the task of dismantling and clearing the formwork commenced, and, no adequate risk assessment that might have identified the penetration or might have ensured the integrity of penetration covers in the lift shaft prior to the commencement of the work. The defendant did not ensure a safe system of work for the dismantling and clearing of the formwork in the lift shaft. The head contractor, Leighton Contractors, required Dolso Constructions Pty Ltd to produce a work method statement, when the work was considered high risk. Anthony Baroni, the defendant's supervisor and foreman at the premises apparently considered that the task being undertaken by Mr Kos was low risk. Either as a consequence of this view or for some other reason no specific work method statement was generated for the dismantling and clearing of the formwork in the lift shaft. Mr Kos received site specific induction training but he is from a non-English speaking background and claimed that he did not understand the training. He completed an induction questionnaire containing nine questions but answered five of them incorrectly. No follow up action was taken to provide Mr Kos with adequate training. Mr Kos held no relevant certification of competency in relation to the work he performed. There was no system in place to ensure the integrity of penetration covers prior to the dismantling and clearing of formwork. The defendant did not adequately warn Mr Kos of the dangers posed by penetrations on the premises. 8 The Court was advised by Mr Cahill that the defendant has no prior convictions. Defendant's evidence 9 The defendant represented by Mr Pearce of counsel relied on an affidavit of Laurie John Dolso sworn on 4 March 2005 in the sentence proceeding. Mr Dolso is the director of the defendant and was also a director of Dolso Constructions Pty Ltd. In his affidavit Mr Dolso explained that following the collapse of the insurance company HIH and after failing to receive assurances that his business would be insured he arranged for the defendant to take over the employment of most of the workers employed by Dolso constructions. These arrangements were commenced on 21 March 2001. 10 According to the affidavit the defendant as a member of a group of companies, the Dolso Fastform Group, had an occupational health and safety policy. The policy is dated 17 September 1997. Part 2 of the policy is headed OH&E Risk Assessment of the Works and Safe Working Practices. This section deals with the erection of frames, formwork decks, formwork stripping and the associated potential hazards and precautions required to be taken. In relation to the erection of formdecks there is a requirement in relation to covering penetrations expressed in the following terms: All penetrations shall be covered with a mesh, cast into the slab. In a section of the policy headed "Formwork Stripping", the area of general decking to be stripped was to be flagged off and stripped with flag bunting and signs headed "Stripping in Progress" were to be erected. 11 In addition to the policy the defendant had developed a number of safety initiatives and procedures to be implemented at the premises. Included in these initiatives and procedures was a system outlined in the booklet entitled Safety Management System for ABC Sydney Accommodation Project, issued 4 June 2001. Also developed specifically for the work at the ABC Sydney premises was a series of work method statements issued on 10 January 2001 which sought to identify potential hazards at the worksite. WMS 41 headed, "Stripping High Formwork" contained a number of requirements including the requirement to flag off the area to be stripped and to erect appropriate signage. Other requirements dictated inspections of working platforms prior to the commencement of the work, and, the securing and fastening of all intermediate working platforms to prevent unplanned movement. Other initiatives included regular site safety meetings and tool box talks. The latter also required workers to sign off following attendance at these talks. (I note in relation to the tool box talks that the defendant has annexed some records of tool box talks signed off by Mr Kos, which relate to another workplace namely Westfield Hornsby. One which is not signed off by Mr Kos is in relation to the ABC Sydney premises but dated 20 July, that is after the offence). 12 In addition to the safety initiatives mentioned above the defendant also required inspections of the site prior to the commencement of the work, regular safety training and site specific inductions. Records annexed to the defendant's affidavit for example indicate that Mr Kos completed an induction course on 23 October 1997 and induction training on 2 September 1999. He was also provided with a safety handbook issued by Leighton Contractors on 7 February 2001. 13 Contrary to what is asserted in the agreed statement of facts in regard to the site specific induction questionnaire in which Mr Kos failed to answer correctly five out of nine questions, Mr Dolso says that the defendant provided further training to Mr Kos. The training was completed by Mr Kos on 4 July 2001. A certificate annexed to the affidavit confirms that Mr Kos on 4 July 2001 satisfactorily completed an induction training for a construction work course which was conducted by a WorkCover accredited trainer. 14 Mr Umberto Baldovin who was working with Mr Kos on 16 July 2001 had also completed various training programmes prior to that date. Documentation setting out the appropriate details are annexed to the affidavit. Mr Kos' immediate supervisor, Mr Baroni had also according to the certificates annexed to the affidavit received safety training prior to the offence. 15 The affidavit also sets out a number of new and amended procedures which the defendant put in place following the accident to Mr Kos. The system of work for example was amended to incorporate an arrangement for the identification of any penetration covers by the spraying of a large red 'X' to highlight the position of the cover on the floor. Further training was also provided and safety inspection procedures revised. On 17 July 2001 the day after the accident a site safety meeting was held during which the employees were introduced to the new system which incorporated the marking of penetration covers. Consideration Proper approach to sentencing 16 Following the decision of Markarian v The Queen (2005) 79 ALJR 1048; 215 ALR 213 and the analysis of that decision by his Honour Justice Boland in Inspector Yeung v Howie Herring & Forsyth Pty Limited & Anor [2005] NSWIRComm 266, I propose to adopt the approach to sentencing in this matter as set out by Boland J in Howie Herring & Forsyth. In that latter decision his Honour concluded (at [39] - [40]): In the absence, however, of any clear indication in Markarian that a sentencing court may not use a two-stage approach to sentencing and may not give separate consideration to the objective circumstances of the crime (in fact at [38] in the joint judgment it appears to be said that this may be justified) and given that the implications of Markarian for the approach required by Lawrenson Diecasting [ Pty Ltd v WorkCover Authority of New South Wales (Inspector James Swee Ch'ing [1999] 90 IR 464] were not fully debated before me, especially as to the statutory context in which sentencing occurs in this jurisdiction, I am disinclined to depart from the approach required by Lawrenson Diecasting . The approach I have taken, therefore, is that required by Lawrenson Diecasting. The guideline judgment in R v Thomson [ R v Houlton (2000) 49 NSWLR 383] continues to be one this Court is required to take into account and it is appropriate that I indicate a discount at least for the utilitarian value of the guilty plea. In the light of Markarian it is necessary that I take into account all relevant considerations in sentencing (which has always been part of the jurisprudence) and "make a value judgment as to what is the appropriate sentence given all the factors of the case" subject to the approach required by Lawrenson Diecasting . Amongst the objective and subjective factors I am required to take into account are those in ss 21A, 22 and 23 of the Crimes (Sentencing Procedure) Act . I do not consider it is any longer appropriate to take the approach of determining an amount of penalty based on the relevant objective considerations and deducting from that amount allowances for the individual subjective factors. Maximum penalty 17 The Court was informed by the prosecutor during the sentence proceeding that the defendant had no prior convictions. The maximum penalty therefore applicable to the defendant, being a corporation at the time of the offence is $550,000. Systems of work 18 The evidence of Mr Dolso, the director of the defendant reveals that at the time of the offence and in relation to the ABC Sydney premises, the defendant had in place a comprehensive set of safety initiatives and procedures as part of an ongoing and impressive commitment to occupational health and safety practices. The existence of such initiatives and procedures is a factor I take into account in mitigating the objective seriousness of the offence: Department of Mineral Resources (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8; Inspector Stephen Charles v Port Kembla Copper Pty Limited [2005] NSWIRComm 54 at [66]. 19 There was however no procedure implemented by way of a specific safe work method statement which dealt with the dismantling and clearing of formwork. WMS 41 which was generated for stripping high formwork was not implemented at the worksite. There was no procedure or initiative in relation to the identification of the location of penetration covers. A procedure for adequately securing penetrations existed but was not adhered to by the defendant at the time of the offence. Annexed to Mr Dolso's affidavit is a copy of a Safety Handbook issued by the Dolso Fast Form Group. According to Mr Dolso a copy of the Handbook was provided to Mr Kos on 7 February 2001 and, again on 3 July 2001. Page 10 of the Handbook contains the following entry in relation to floor penetrations: Floor penetrations must be securely covered and/or fenced off with handrails and kickboards. Any barrier removed to carry out work must be replaced prior to leaving area. Protection from falling objects is imperative in these circumstances. Any unprotected penetrations or openings must be immediately covered and reported to your supervisor. The offence arose in circumstances where Mr Kos was working at a height above the ground of some 5.4 metres. This made the task potentially hazardous. These features highlight a principle of workplace safety which is relevant here, namely, the requirement of an employer to be proactive in relation to safety issues and to be on the offensive and search for, detect, minimise and wherever possible eliminate risks to safety: see for example Kembla Coal & Coke at [26]. Obvious and foreseeable risk to safety 20 The risk to safety which confronted Mr Kos was the risk of falling a considerable distance by reason of the presence of an unmarked and inadequately secured large penetration. The existence of this penetration was sufficiently concealed so that it presented a hidden trap to an unsuspecting worker. It also had the potential to cause serious injuries. 21 This risk was both obvious and foreseeable. It was obvious because it was recognised in the safety literature issued by the defendant as a potential hazard. It was also obvious because it is well recognised that the construction industry is a dangerous industry and that many prosecutions in that industry under the Act involve risks of falling from heights: WorkCover NSW (Inspector Yeung) v Thiess Pty Ltd (No 2) [2004] NSWIRComm 96 per Boland J at [25]. 22 The risk was foreseeable in the circumstances where Mr Kos was working at a height of 5.4 metres and he was not informed that a sizeable unmarked penetration existed underneath an inadequately secured cover. The Court was informed from the bar table by Mr Pearce that the penetration cover was in fact fixed by two nails at the time of the accident and that it must therefore follow that Mr Kos exerted some force when he dislodged it. Even so, in my view, this could have little impact, if any, on the risk to safety which was a risk of falling, or on the foreseeability of that risk. These circumstances render the offence objectively serious: Capral Aluminium Ltd v WorkCover Authority of New South Wales (Insp Mayo-Ramsay) (2000) 49 NSWLR 610; 99 IR 29 at [81] [82]. Simple measures available to obviate the risk 23 The offence is rendered more serious because the risk to safety could have been easily avoided by the taking of simple steps such as the marking of penetration covers at the time of installation, and, the observance of the requirement to inspect all formwork decks before stripping and dismantling commenced. Following the accident the defendant in fact implemented these straightforward procedures by imposing a requirement that all penetration covers be painted with a red 'X' and holding a safety meeting to make all workers aware of that fact: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 476. Consequences of the breach 24 Adding to the overall objective seriousness of the offence is the inescapable conclusion that as a result of the defendant's failures and Mr Kos' fall through the penetration, his injuries could have been extremely serious, even fatal. In the event Mr Kos suffered serious injuries as a direct result of the defendant's breach: Maddaford v CSR Limited and Mulgoa Quarries Pty Ltd [2004] NSWIRComm 337 at [17]. General and specific deterrence 25 The principles of general and specific deterrence are clearly applicable to the circumstances of the offence. The construction industry is a notoriously dangerous industry and risks to safety occasioned by the risks of falling from heights are well documented in the occupational health and safety jurisdiction of this Court. It follows that it is of particular significance to emphasise the importance of employers meeting their obligations under the Act and of the need for employers to ensure not only that adequately safe systems of work are devised but that they are also appropriately implemented in the workplace. 26 Specific deterrence is also important given the nature of the industry in which the defendant continues to operate. The special significance of specific deterrence in the context of occupational health and safety has been acknowledged in Capral Aluminium at [77]. No prior convictions 27 A factor to be taken into account in the defendant's favour is the absence of prior convictions. This entitles it to leniency which is normally extended to an offender who is otherwise not adversely recorded. Early plea of guilty 28 The amended application for order was amended and filed by the prosecutor shortly before this sentence proceeding. The defendant entered a plea of guilty to the amended application at the first available opportunity which was at the commencement of the proceeding. The prosecutor concedes that in the circumstances the plea was entered at an early stage. Taking these matters into account I consider that the defendant is entitled to a discount of 25 percent in accordance with the principles outlined in R v Thompson; R v Houlton (2000) 49 NSWLR 383; 115 A Crim R 104. Contrition and remorse 29 The defendant is also entitled to a measure of leniency on the grounds of contrition and remorse for entering a plea of guilty in accordance with the principle outlined for example in Winchester (1992) 50 A Crim R 345 at 350. Also relevant to contrition in my view is the defendant's actions in relation to Mr Kos' rehabilitation following the accident. Mr Dolso, according to his affidavit instructed Mr Baroni to regularly check on Mr Kos' recovery; and the defendant's safety coordinator, Ms Karen Moore, was instructed to monitor Mr Kos' progress. Cooperation 30 The defendant is also entitled to some discount with respect to its cooperation with the WorkCover Authority during the investigation into the circumstances of the accident. Penalty 31 In determining penalty against the defendant I have taken into account the objective seriousness of the offence, the personal factors identified above, and the absence of prior convictions. These factors have been considered by reference to the Crimes (Sentencing Procedure) Act 1999 in particular s 21A. Orders 32 In Matter No IRC 3844 of 2003 I make the following orders: 1. The defendant Proform Systems Pty Limited is convicted of the offence. 2. The defendant Proform Systems Pty Limited is fined $80,000 with a moiety to the prosecutor. 3. The defendant Proform Systems Pty Limited is to pay the costs of the prosecutor as agreed or in the absence of agreement, as assessed. _______________________ 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.