Industrial Relations Commission of New South Wales in Court Session CITATION : Morrison v ACR Maintenance Pty Limited and anor [2003] NSWIRComm 222 PROSECUTOR IN MATTER IRC02/3306 AND IRC02/3307 Rodney Dale Morrison DEFENDANT IN MATTER IRC02/3306 PARTIES : ACR Maintenance Pty Limited DEFENDANT IN MATTER IRC02/3307 Australian Crusher Repairs Pty Limited FILE NUMBER: IRC3306 & 3307 of 2002 CORAM: Peterson J CATCHWORDS : Occupational health and safety - ss15(1) and 17(1) - Pleas of guilty - Employee crushed when heavy equipment toppled over - Two defendants are related companies charged in relation to one source of risk - Principle of totality applied in assessing penalty - Discount - Penalty imposed. LEGISLATION CITED : Occupational Health and Safety Act 1983 ss15 17 Inspector Twynham-Perkins v Maine Lighting per Bauer J (1995) 100 IR 248 CASES CITED : Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1990) 90 IR 464 R D Morrison v GPR [2003] NSWIRComm 56 HEARING DATES: 06/02/2003 DATE OF JUDGMENT: 07/18/2003 PROSECUTOR Mr M K Scott of counsel SOLICITOR Department of Mineral Resources of New South Wales. LEGAL REPRESENTATIVES: DEFENDANT Mr R S Warren of counsel SOLICITOR Arnolds Lawyers NEWCASTLE. JUDGMENT: - 12 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: PETERSON J DATE: 18 JULY 2003 Matter No. IRC3306 of 2002 RODNEY DALE MORRISON v ACR MAINTENANCE PTY LIMITED Prosecution under s17(1) of the Occupational Health and Safety Act 1983 Matter No. IRC3307 of 2002 RODNEY DALE MORRISON v AUSTRALIAN CRUSHER REPAIRS PTY LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983 JUDGMENT 1 The defendants in these prosecutions, which were heard together, are related companies. Australian Crusher Repairs Pty Limited ('Australian Crusher Repairs') is a corporation which undertakes maintenance work on quarry equipment, mainly consisting of crushers and screens. It employs persons in that work and also, at least in the present instance, engaged additional labour through a labour hire company, GPR Engineering (Central Coast) Pty Limited ('GPR'). 2 ACR Maintenance Pty Limited ('ACR Maintenance') is a company formed by those having control of Australian Crusher Repairs for the purpose of a maintenance contract with Boral in relation particularly to the Emu Plains quarry. 3 On 13 June 2000, an incident occurred at the Emu Plains quarry which gave rise to the present proceedings. An employee of GPR, Rodney Welsh, a leading hand/maintenance fitter and certificated dogman and overhead crane driver, was performing work at the Emu Plains quarry in the capacity of labour hired out to ACR Maintenance. He had with him an apprentice, Derek William Collins. 4 The work to be performed involved the transportation from the workshop of a piece of equipment forming part of a crushing plant and weighing 12 tonnes. The equipment was transported by a mobile, truck-mounted crane to a point from which it was to be lifted into the crusher building by an overhead crane mounted on the building structure. While releasing the lifting chains from the mobile crane in order to connect the overhead crane, the unit toppled to the side, crushing Mr Welsh between the mobile crane and the unit. 5 The defendant, ACR Maintenance, has pleaded guilty to a charge that it breached s17(1) of the Occupational Health and Safety Act 1983 ('the OHS Act') in that it "being a person who had control of non-domestic premises, at Boral Quarry at Emu Plains, in the State of New South Wales, which were made available to persons as a place of work, did on 13 June 2000 fail to ensure that the premises were safe and without risk to health". 6 Australian Crusher Repairs has pleaded guilty to a charge that it committed an offence under s15(1) of the OHS Act in that it "being an employer, at Boral Quarry, at Emu Plains, in the State of New South Wales did on 13 June 2000 fail to ensure the health, safety and welfare at work of all of its employees, in particular Alex Colvin" (the Maintenance Manager supplied by that defendant). 7 The facts in each matter were the subject of agreed statements of fact which were substantially similar, but the substance of which were: ACR Maintenance - IRC02/3306 1. At all material times the Defendant provided repairs and maintenance services for mining machinery and equipment. 2. At all material times Rodney Welsh was an employee of GPR Engineering (Central Coast) Pty Ltd; 3. At all material times GPR Engineering (Central Coast) Pty Ltd hired out the services of Rodney Welsh to ACR Maintenance Pty Ltd as a leading hand/maintenance fitter. As at 13 June, 2000 Mr Welsh had worked at the quarry continuously for two years 3 months. 4. At all material times Rodney Welsh held both crane and dogman tickets and was a leading hand; 5. Boral Resources (NSW) Pty Ltd owned and operated a Quarry at Emu Plains in the state of New South Wales ("Boral Quarry"); 6. Boral Construction Materials Group Limited employed wages staff to operate plant, equipment and to facilitate production at the Boral Quarry; 7. Boral Resources (NSW) Pty Ltd and/or Boral Construction Materials Group Limited had contracted ACR Maintenance Pty Limited, to provide maintenance services to production related fixed plant and infrastructure at the Boral Quarry; 8. On 13 June 2000 ACR Maintenance Pty Limited was undertaking maintenance and repair work on a TX Jacques Crusher mainframe at the Boral Quarry; 9. On 13 June 2000 at about 2.00pm Rodney Welsh was working as part of a four man team responsible for reinstalling the TX Jacques crusher mainframe inside the Boral Quarry Primary Crushing Plant; 10. At all relevant times Rodney Welsh was under the direction of Alex Colvin and was working with Mr Perkins (fitter), Derek Collins (Apprentice Fitter) who were employees of GPR Engineering (Central Coast) Pty Ltd and Alex Colvin (Australian Crusher Repairs Pty Ltd's Maintenance Manager). At the relevant time, Mr Welsh held appropriate WorkCover certificates as a dogman and overhead crane driver, and with regard to the transportation of the crusher mainframe, Mr Welsh acted as the dogman with regard to the lifting and positioning of the crusher mainframe; 11. Prior to the reassembly and transport of the mainframe, no risk assessment was conducted; 12. On 13 June 2000 Rodney Welsh assisted in the re-assembly of the crusher mainframe in the workshop. When this was completed the crusher mainframe was lowered by the workshop overhead crane onto the concrete floor of the workshop; 13. The crusher mainframe was transported from the Quarry's workshop to an area adjacent to the primary crushing plant via a mobile crane utilising chain slings. It was placed on the ground beneath an overhead crane which extended outside the primary crushing plant. This method of transportation was not one used by Mr Colvin in the preceding three years, during which time he had been involved in similar jobs at the Emu Plains Quarry on three occasions; 14. The crusher mainframe was placed on two wooden dunnage sleepers upon the ground for support. The ground was soft underfoot. On 13 June, 2000 additional dunnage sleepers were not available for use in the transportation of the crusher mainframe; 15. The top of the mainframe was 2.05m in diameter whilst the bottom of the mainframe (which were sitting on the sleepers) were on a pitch circle diameter of 0.5m. The mainframe weighed approximately 12 tons. The dimensions of the mainframe were such that when it sat on its hyrdo set on uneven ground, it was unstable; 16. The boom of the mobile crane was then lowered and the weight was taken off the chain slings. Rodney Welsh then sought to test the stability of the crusher mainframe by pushing it with his hands; 17. Whilst performing the re-installation, Rodney Welsh climbed onto and inside the crusher mainframe; 18. While performing the re-installation, Rodney Welsh attempted to remove the chain slings from the mobile crane's lifting hook so that they could be transferred to the lifting hook for the overhead crane; 19. Whilst attempting to remove the chain slings from the mobile crane hook, the crusher mainframe tilted forward in a northerly direction until the drive pulley, mounted on that side of the crusher mainframe, came to rest on the ground. As a result of this, Mr Welsh became trapped between the boom and the hook of the mobile crane and the inner rim of the crusher mainframe; 20. At the time that Rodney Welsh became trapped he suffered a severe crush injury to the pelvic region along with a severe (compound) fracture/ligamentous injury to the left knee; 21. Rodney Welsh's abdominal and knee injuries were operated upon. Rodney Welsh was hospitalised from 13 June 2000 until 25 July 2000; 22. The Defendant has no prior conviction. Australian Crusher Repairs - IRC02/3307 1. At all material times the Defendant provided repairs and maintenance services for mining machinery and equipment; 2. At all material times Alex Colvin was an employee of the Defendant; 3. At all material times Alex Colvin was seconded from Australian Crusher Repairs Pty Ltd to ACR Maintenance Pty Ltd in the capacity of Maintenance Manager; . . . 6. On 13 June 2000 at about 2.00pm Alex Colvin was working as part of a four man team whose duties included re-installing a TX Jacques crusher mainframe inside the Boral Quarry Primary Crushing Plant; 7. Alex Colvin was working with Mr Perkins (fitter), Derek Collins (Apprentice Fitter) and Rodney Welsh (Leading Hand/Maintenance Fitter) who were employed by GPR Engineering (Central Coast) Pty Ltd; 8. Rodney Welsh had worked continuously at the quarry for two years three months and at the relevant time was under the direction and supervision of Alex Colvin. . . . 11. The crusher mainframe was transported from the quarry's workshop to an area adjacent to the primary crushing plant via a mobile crane utilising chain slings. It was placed on the ground beneath an overhead crane which extended outside the primary crushing plant. This method of transportation was not one used by Mr Colvin in the preceding three years, during which time he had been involved in similar jobs at the Emu Plains Quarry on three occasions; . . . 19. The Defendant has no prior conviction. 8 In addition to the agreed facts, evidence was adduced in the defendants' cases. Mr Collins, the apprentice fitter working with Mr Welsh, deposed relevantly: 5. At the time the crusher was placed on the ground by the Franna crane, I expressed my concerns of safety to Rodney Welsh. I noticed that the mainframe sat on a bit of a lean and I said words to the effect: "It's on a lean. I don't think it's safe." 6. Rodney Welsh did not reply but attempted to test the stability of the crusher with his hands. 7. Prior to Rodney Welsh climbing onto and inside the crusher, I again expressed my concerns of safety by stating words to the effect to Rodney Welsh: "I would not hop up there, it does not seem safe. It's on a lean." 8. Rodney Welsh did not reply but instead climbed onto and inside the crusher. 9 Evidence was also adduced from Antonio Peter Savia, the Chief Executive Officer of the two defendants, referred to by him as "the ACR Group". Mr Savia holds Bachelor of Commerce and Master of Business degrees and is a certified practising accountant. He became the Chief Executive Officer of the ACR Group on 1 November 2000. He owns one-third of the defendant, Australian Crusher Repairs, which wholly owns ACR Maintenance. The latter does not employ any persons. 10 While prior to the incident the ACR Group had in place a Safe Working Procedures Manual that contained risks/hazard assessment guidelines in regard to uneven floor or ground terrain, mobile plant condition and moving objects, Mr Savia deposed, consistently with the agreed statement of facts, that Mr Welsh was performing his maintenance tasks without being formally instructed in regard to risk assessment or procedure for the safe removal and re-installation of the crusher mainframe. 11 Mr Welsh had been given a copy of the Safe Working Procedures Manual when he completed a Safe Work Practice induction on 9 November 1998 and had attended an updated induction on 23 February 1999. 12 Mr Savia's affidavit continued: Corrective Action After The Incident: 8. After the incident I oversaw the implementation of a number of remedial safety measures designed to make the workplace safer and raise the level of safety awareness amongst employees. 9. I employed a designated Safety Officer. 10. As the Chief Executive Officer, I undertook formal occupational health and safety education myself, to raise my own level of safety awareness and responsibilities. 11. Prior to the accident, I was involved in the process of developing a safety management system for the ACR Group. Since the incident, I have overseen the development and completion of the safety management system. I sought the assistance of an external consultant to assist with the development and an audit of our existing system. The audit carried out by the consultant states that the ACR safety system is " … very well put together and in my opinion sufficiently covers your Occupational Health and Safety responsibilities." and "Your system demonstrates a significant commitment to safety from management. It is evident that you are committed to creating a culture of safety and learning in your workplace …" and "Your personal belief in the culture you are creating is evident when speaking with yourself and the efforts you are going to, including obtaining formal OH&S qualifications, to ensure you provide a safe workplace complying with current legislation" and is annexed to this affidavit as annexure "C". 12. I assisted in the implementation of designated training programmes on the subject of risk assessment for all employees. 13. Mr Vin Cross, who was a Director of the ACR Group, published a memorandum to employees setting out the procedure for future work associated with crushers. This is shown at annexure "D". 14. After the incident, I oversaw the design and development and manufacture of two Crusher Stand/Support Frames shown as photographs at Annexure "E" of this Affidavit at a total construction cost of $21,000.00. The Crusher Stand/Support Frames are used to house the Crusher when transporting or carrying out maintenance work on the Crusher and provide a safe system of work for employees and others. I oversaw the sale of one Crusher Stand/Support Frame to Boral Resources (NSW) Pty Ltd for use at the Emu Plains Quarry site (sic). 15. ACR Group Engineer, Mr David Thomas designed the concrete slab that was laid adjacent to the crushing plant at Boral Emu Plains Quarry Site to provide a structurally sound base for the crusher and stand, and to prevent any reoccurrence of injury (sic) 16. I have advertised since January 2003 for a suitably qualified occupational health and safety officer at the Emu Plains Quarry. 17. The total cost to ACR Group in carrying out the corrective action after the incident was $248,950.00. 18. The ACR Group and I greatly regret the accident to Mr Welsh and the injuries suffered by him. Assistance to Mr Welsh: 19. Following the incident, the ACR Group assisted Rodney Welsh both financially and in terms of rehabilitation. Specifically, the ACR Group employed Mr Welsh (who was previously employed by GPR Engineering (Central Coast) Pty Ltd) as a Trainee Engineer/Draughtsman on 23 April 2001 for a period of approximately two years, until 21 February 2003, when Mr Welsh resigned. 20. The ACR Group provided and paid for Mr Welsh to attend TAFE and complete a Diploma in Drafting to equip him with further post employment skills. 21. ACR Maintenance Pty Limited paid the difference between the statutory workers' compensation payment and Mr Welsh's usual wage whilst he was having medical treatment between 17 December 2001 and 27 May 2002, even though Mr Welsh was employed by GPR Engineering for part of this time. 22. ACR Maintenance Pty Limited paid for all time off work required by Mr Welsh to attend medical and other appointments until he was able to resume full-time duties on 27 May 2002. 23. The total financial cost in providing assistance to Mr Welsh following the incident was $72,949.00. 13 Mr Scott of counsel for the prosecutor drew attention to the absence of any risk assessment for the task. He referred to the soft ground on which the two dunnage sleepers were placed and the mainframe then positioned on them. This involved an obvious risk to all persons performing the work. There could be no merit in any proposition that the defendant could rely on the experience of the workers (WorkCover Authority of New South Wales (Inspector Twynham-Perkins) v Maine Lighting Pty Limited per Bauer J (1995) 100 IR 248 at 257). He referred to the fact that Mr Colvin was seconded to the works on the date of the accident offers the defence no comfort (see Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 at 457). The objective seriousness of the offence is the relevant test (Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 476). Here, there was a clear foreseeability of the risk of injury. The matter involves a failure which may be quantified in the mid-range of penalty. It was conceded the matter did not raise issues at the upper end of the range. Counsel submitted that there were reasons in this case, instanced by the operation of a labour hire firm and contractors in a significant industry, for consideration to be given to ensuring a result which demonstrated a real deterrence, both on general and specific deterrence aspects. It was accepted that the defendants were entitled to the benefit of their early plea. 14 In response to a question from the court, Mr Scott submitted that the relationship between the two defendants ought not affect, in a downwards direction, the quantification of penalty. They were different legal entities and involved in different offences. Indeed, were they only one entity, there would have been scope for two prosecutions. It was submitted the practice of disintegration of companies is a matter which the court ought be concerned is capable of creating difficulties of enforcement and suspension. 15 On the last point Mr Warren of counsel for the defendants submitted that this is a case in which a "global" penalty ought be considered. ACR Maintenance was formed at the behest of Boral and not for the purposes of avoiding any responsibilities, particularly under the OHS Act. This was a circumstance which could just as easily have been operated through one corporation and involved only one penalty. 16 Counsel emphasised the developments by the defendants of their safety policy since the accident and the assistance which had been provided to Mr Welsh. Mr Welsh had been employed by GPR and, upon his termination by GPR, the ACR Group assumed responsibility for his salary and also his rehabilitation and retraining to a point where he was able to pursue, of his own volition, alternative employment. 17 The support of Mr Welsh shows real contrition on the part of the defendants and a commitment to rehabilitation in the best spirit of OHS legislation. 18 It was noted that GPR was the subject of proceedings before Staunton J in Rodney Dale Morrison v GPR Engineering (Central Coast) Pty Limited [2003] NSWIRComm 56 unreported, 21 February 2003. There, her Honour assessed penalty, on a notional basis because of the cessation of GPR's operations, at $40,000 and after full credit with respect to discounts on penalty, imposed a penalty of $26,000. 19 It was submitted that the culpability of the defendants in the present matters is no greater than that of GPR. Labour hire firms have been held to have a higher duty than those to whom they supply labour, because of the absence of opportunity to maintain an ongoing supervision of staff. It was submitted that the court should take into account to the fullest extent the early guilty plea; the clear contrition demonstrated by the defendants by their support of Mr Welsh and the cooperation with WorkCover. These charges involve first offences. Conclusions 20 Counsel were not able to refer me to any decided authority, and I have been able to find none, concerning the way in which the question of assessment of penalty ought be approached by the court, where there are, as here, two defendants, related companies, in relation to the one source of risk to which two persons were exposed in the circumstances of the work on 13 June 2000. Were ACR Maintenance not required by Boral, for whatever reason, to be created as the contracting party, the contract work may have been undertaken by Australian Crusher Repairs directly. In those circumstances, it would seem that the occurrence of the relevant circumstances giving rise to any offence would attract a penalty of a maximum of $550,000. The segregation of the contracting arm into ACR Maintenance, for the purpose of this contract alone, has the theoretical effect that the two companies are exposed to the maximum penalties of $550,000 in each case. There does not seem to be any justice in assessing penalty in each case independently of the other with the inherent dangers that would involve of assessing penalty at too high a level. Were the work done through one corporation, the totality principle would deal with two prosecutions under ss15 and 16. I do not see any substance in the view of the prosecutor that the "disintegration" of the corporate structure is a matter of concern. There is no suggestion on the evidence that the corporate structure was devised to defeat or avoid OHS obligations. Indeed, these prosecutions deny any such effect. Given the common elements of the offences and the corporate structure, I intend to assess penalty in accordance with the principle of totality, thereby giving the two ACR corporations as much credit in that respect as may be, in my view, legitimately granted. 21 In assessing penalty in this matter I have taken into account the approach of Staunton J in R D Morrison v GPR Engineering (Central Coast) Pty Limited (ibid). In that matter her Honour fixed what was described as a notional penalty of $40,000, which was discounted to $26,000 after the application of s6 of the Fines Act concerning the financial means of the defendant. In the present matter financial means are not raised by the defendants. However, the circumstances of the defendants' early pleas, contrition as evidenced by its support for the injured worker and the remedial action taken in response to the accident, both of which I consider to have been considerable, and the absence of prior convictions, cause me to conclude that it would be appropriate in this matter to afford the maximum discount on penalty of 35%. 22 The quantum of penalty necessarily must be greater than that imposed by Staunton J, given the differing circumstances between the defendants and the fact that the various charges, although relevantly different, arise out of the same set of circumstances. Any view that the employer, GPR, should be found more culpable could not overcome that view in this case. The principle of totality requires that penalty be determined separately for each charge before totality is applied. In these matters, I consider an appropriate penalty in each matter would be $75,000 which, after discounts, would result in a penalty of $48,750. Applying totality, I consider an appropriate overall penalty to be $55,000. 23 In Matter No. IRC3306 of 2002 the defendant is convicted of the offence with which it was charged and fined the sum of $27,500. 24 In Matter No. IRC3307 of 2002 the defendant is convicted of the offence with which it was charged and fined the sum of $27,500. 25 In each case the Department of Mineral Resources shall have a moiety of penalty. The defendants shall pay the prosecutor's costs in a sum as may be agreed or, in the absence of agreement, assessed by the court. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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