Industrial Relations Commission of New South Wales in Court Session CITATION: Inspector Clampett v Eveready Plumbing & Maintenance Pty Limited [2005] NSWIRComm 138 PROSECUTOR Inspector Clampett PARTIES: DEFENDANT Eveready Plumbing & Maintenance Pty Limited FILE NUMBER(S): IRC 4774 of 2004 CORAM: Staff J CATCHWORDS: Occupational Health & Safety - Prosecution under s 8(2) of the Occupational Health & Safety Act 2000 (NSW) - Accident involving apprentice while carrying out plumbing work in excavation - Gas explosion - Deficiency in risk assessment undertaken - Impressive safety system militates seriousness of offence - Documented system not sufficiently comprehensive - Increased responsibility in presence of young and inexperienced worker - Good industrial citizenship - Long period of operation - Immediate refinement of existing safety policy - Decision to no longer perform certain types of high risk work - Plea of guilty - Penalty - Foreseeability - Simple and straightforward steps available to prevent risk to safety - General and specific deterrence - Contrition - No prior convictions - Assistance to prosecutor - Discount for plea of guilty - Occupational Health & Safety Act 2000 (NSW), s 8(2) Crimes (Sentencing Procedure) Act 1999 LEGISLATION CITED: Occupational Health & Safety Act 2000 Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610, 99 IR 29 Corinthian Industries (Sydney) Pty Ltd v WorkCover Authority of New South Wales (Inspector Wilson) (2000) 99 IR 159 Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 Fletcher Construction Australia Limited v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1998) 90 IR 464 Morrison v Powercoal Pty Ltd & Anor (No 3) [2005] NSWIRComm 61 Morrison v Powercoal Pty Ltd (2003) 130 IR 364 R v Thomson, R v Houlton (2000) 49 NSWLR 383 Sydney County Council v Coulson (1987) 21 IR 477 CASES CITED: Tyler v Sydney Electricity (1993) 47 IR 1 Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 WorkCover Authority (NSW) (Inspector Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383 WorkCover Authority (NSW) (Inspector Tyler) v Abigroup Contractors Pty Ltd (2000) 99 IR 196 WorkCover Authority (NSW) v Wonar Pty Ltd (unreported, Industrial Court, NSW, No 1214 of 1990, Fisher CJ, Glynn and Cullen JJ, 30 June 1992 WorkCover Authority of New South Wales (Inspector Barbosa) v Newstart 150 Pty Ltd (t/a Style Wise Interiors) (2002) 113 IR 78 WorkCover Authority of New South Wales (Inspector Glass) v Kellogg (Aust) Pty Ltd (2000) 101 IR 261 WorkCover Authority of New South Wales (Inspector Olive) v Transfield Pty Limited [2001] NSWIRComm 295 WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Limited and Anor (No 2) (2000) 99 IR 163 WorkCover Authority of New South Wales (Inspector Penfold) v Fernz Construction Materials Ltd [No 2] (2000) 100 IR 23 HEARING DATES: 04/01/2005 DATE OF JUDGMENT: 04/27/2005 PROSECUTOR Mr D Jordan of counsel Solicitor: Ms F Miller WorkCover Authority of NSW LEGAL REPRESENTATIVES: DEFENDANT Ms P McDonald of counsel Solicitor: Mr T Plummer Moray & Agnew JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Staff J 27 April 2005 Matter No IRC 4774 of 2004 INSPECTOR CLAMPETT v EVEREADY PLUMBING & MAINTENANCE PTY LIMITED Prosecution under s 8(2) of the Occupational Health & Safety Act 2000 JUDGMENT [2005] NSWIRComm 138 1 On 4 December 2002, Mr Graeme Richardson, an apprentice plumber was assisting Mr Matthew Campbell, a qualified plumber employed by Eveready Plumbing and Maintenance Pty Limited ("the defendant") to repair a leaking water pipe at a residential town house complex at 16 Hillcrest Drive, Quakers Hill, New South Wales. Mr Richardson was under the defendant's direction and supervision but was not employed by the defendant. 2 The leaking water pipe was located in an excavation which had been dug into the driveway of the premises. While Mr Richardson was using oxyacetylene equipment in the excavation there was an explosion comprising an eruption of air and dust followed by a fireball emanating from the excavation. 3 Mr Richardson sustained burns to his face, back, right elbow and legs. 4 The defendant, who has pleaded guilty, was prosecuted by Inspector Clampett under s 8(2) of the Occupational Health & Safety Act 2000 ("the Act"). 5 This judgment deals with the penalty that should be imposed upon the defendant. 6 In an amended application for order, the prosecutor alleged: On 4 December, 2002 the defendant, being an employer, failed to ensure the health or safety of persons other than the defendant's employees and, in particular, Graeme Richardson, were not exposed to risks arising from the conduct of the defendant's undertaking while they were at the defendant's place of work contrary to Section 8(2) of the Occupational Health & Safety Act, 2000. Particulars (a) On 4 December 2002 the defendant directed Matthew Campbell and Graeme Richardson to repair a leaking water pipe at 16 Hillcrest Drive, Quakers Hill, NSW ("the premises"). Matthew Campbell was a plumber employed by the defendant. Richardson was an apprentice plumber under the defendant's direction and supervision but was not employed by the defendant. (b) The repair to the leaking water pipe was in an excavation, which had been dug into the driveway of the premises ("the excavation"). The excavation was approximately 0.8 by 0.8 metres wide at the surface. The depth of the excavation was around 1.2 metres and variable. Beneath the surface, the excavation was up to 1.5 metres in width. (c) Live services including electricity, communications and, in particular, gas, were exposed within the excavation within the vicinity of the leaking water pipe. These services were not isolated before commencing work to repair the leaking water pipe. (d) Under Matthew Campbell's supervision, Graeme Richardson entered the excavation and used oxyacetylene equipment to cut and solder the water pipe. (e) While Richardson was using oxyacetylene equipment in the excavation, there was an explosion comprising an eruption of air and dust followed by a fireball emanating from the excavation. (f) As a result of the explosion, Graeme Richardson sustained burns to his face, back, right elbow and legs. (g) In these circumstances the defendant: (i) failed to properly assess the risks of using oxyacetylene equipment to cut and solder the water pipe in the excavation; (ii) failed to ensure that exposed services in the excavation including communications, electricity and, in particular, gas were properly isolated before oxyacetylene equipment was used. 7 An agreed statement of facts was tendered which provided the following information: 7. On 4 December 2002 Richardson was working under the direct supervision of Campbell. 8. On 4 December 2002 Richardson and Campbell were directed by the defendant to undertake a plumbing job at 16 Hillcrest Avenue, Quakers Hill, New South Wales ("the premises"), a residential townhouse complex. The job required them to repair a water pipe in a driveway excavation. 9. The repair to the leaking water pipe was in an excavation, which had been dug into the driveway of the premises (the excavation) by another employee of the defendant prior to Richardson and Campbell attending the premises. The excavation was approximately 0.8 by 0.8 metres wide at the surface. The depth of the excavation was around 1.2 metres and variable. Beneath the surface, the excavation was up to 1.5 metres in width. 10. Live services including electricity, communications and, in particular, gas, were exposed within the excavation in the vicinity of the leaking water pipe. 11. At approximately 8.30 am on 4 December 2002 Campbell and Richardson attended the premises. They located the excavation which was covered and barricaded in the driveway of the premises. 12. They removed the barricades and covers and assessed the job. They discussed the possible risks involved with the job. They noted that there were electrical, gas, water and Telstra services in the excavation. They considered that they could cut and weld the water pipe without cutting the other services located in the excavation. 13. Following his and Richardson's assessment of the site, Campbell completed a risk assessment form. He did not identify the live services in the excavation as a potential risk to health and safety, or the need to isolate the other services within the excavation whilst the repair work to the water pipe was being undertaken. The risk assessment form completed by Campbell was a generic document which was not site specific. The document did include a section titled "will you need to lock/tag out today? (isolate energy sources)" however this section was not completed by Campbell. The document also contained general reference to fire protection and electrical isolation. 14. Whilst Campbell was completing the risk assessment, Richardson prepared the job site. He further excavated around the part of the water pipe to be repaired to allow better access. 15. Campbell and Richardson advised the residents of the premises that the water would be turned off whilst they fixed the pipe. They turned the water off prior to commencing the repairs however did not isolate the other services before commencing work to repair the leaking water pipe. 16. Under his supervision, Campbell, allowed Richardson to conduct the repairs to the water pipe exposed in the excavation, which involved carrying out oxyacetylene welding. 17. Richardson entered the excavation and cut out the damaged section of the water pipe. Campbell prepared a replacement section for the water pipe and then gave it to Richardson to install. 18. Richardson then commenced using oxyacetylene equipment to silver solder the replacement section of the water pipe into place. Richardson completed silver soldering a section of the water pipe. He turned off the oxyacetylene equipment, and he then used a mirror to check the integrity of the underside of the silver soldered joint. He determined that he needed to place more silver solder on the underside of the pipe. Richardson then reignited the oxyacetylene equipment. He then proceeded to recommence silver soldering the pipe, at this point there was an explosion comprising an eruption of air and dust followed by a fireball emanating from the excavation. 19. Richardson suffered burns to his face, back, right elbow and legs as a result of the explosion. Following the incident Richardson was assisted by Campbell out of the excavation and placed in a toddlers pool in front of the premises whilst Campbell sought assistance. 20. It was noticed by Campbell following the incident that there was a flame coming from the gas line. Campbell then isolated the gas line and the flame ceased. 21. Richardson stated "at all times the flame (from the oxyacetylene equipment) was pointing away from the gas pipe" and that he considered "there was enough distance between the pipes so that his work would not affect the gas pipe". 22. WorkCover were notified of the incident shortly after it occurred. Inspector Adam Clampett attended the site on the day of the incident and issued Prohibition Notice no. 146978 and Improvement Notice no. 255233 upon the defendant. The Notices required the defendant to assess risks associated with working in excavations around existing services and to implement and maintain control measures by isolating services when undertaking further work. The Notices also required the control measures to be incorporated into a revised safe work method statement. 23. Richardson had six weeks off work as a result of his injuries and then returned to work on full duties. 24. Prior to the incident the defendant provided staff with an Occupational Health and Safety Handbook which documented generic work procedures to be followed by employees. Whilst the document included procedures for working in excavations and with welding equipment, it did not provide details of safe work methods or procedures relating to safe work and isolation when working in excavations around essential services such as gas and electricity. 25. The defendant's procedures and work method statements for working in excavations in place at the time of the incident, did not identify the risks of working in the vicinity of live services, including the risk of electrocution or shock from electricity, the risk of explosion or asphyxiation from gas or the risk of flooding from water. Nor did the risk assessment carried out by Campbell identify the potential risks. 26. Prior to the incident Campbell had received confined space training. 27. Following the incident the defendant revised it (sic) safe work method statement for working in excavations that contain domestic services, to include a requirement to isolate services. The defendant issued a notice to employees and subcontractors in relation to assessing risks when working in excavations around existing services. The notice included a requirement that all services that exist in the excavation area must be isolated. 28. Following the incident the defendant also revised the manner in which it treated work in excavations. All excavations in which the persons head at any stage will be below the surrounding surface are now treated as confined spaces and only persons appropriately trained in confined spaces are allowed to undertake this work. This work is also only to be undertaken after direct consultation with management of the defendant. 29. The defendant has no prior convictions. 30. The defendant has at all times co-operated fully with the WorkCover Authority. 8 The following documents were exhibited to the agreed statement of facts: Annexure A: Factual Inspection report prepared by Inspector Clampett dated 5 December 2002. Annexure B: Seven colour photographs of the area where the incident occurred, burnt oxyacetylene lines, burnt glasses and hammer handle and a close up of the top of the pit and the base of the excavation where Mr Richardson was working showing water pipe service, gas line service and communication services. Annexure C: Eveready Plumbing Safe Work Methods Statement dated 4 December 2002. Annexure D: Eveready Plumbing and Maintenance Pty Ltd Occupational Health and Safety Handbook. Annexure E: Work Method Statement Number 8 Eveready Plumbing & Maintenance Pty Ltd. Annexure F: Risks Associated with Working in Excavations Around Existing Services dated 9 December 2002; Eveready Plumbing and Maintenance Pty Ltd procedure documents subsequent to incident - risks associated with working in excavations around existing services and notice to all employees and subcontractors and Work Method Statement Number 9 Working in Excavations Around Existing Services; Eveready Plumbing and Maintenance Pty Ltd safety folder as updated since incident. Annexure G: Prior Convictions certificate indicating that the defendant has no prior convictions. 9 The defendant tendered affidavits of Matthew James Kelton, Managing Director of the defendant and Graeme Alfred Richardson, the injured apprentice who is now employed as a plumber with the defendant. Neither witness was required for cross examination. The defendant also provided 18 testimonials. 10 There are four directors of the defendant. Each was present in Court. 11 In his affidavit, Mr Kelton addressed the following matters: (a) The defendant was established in 1983 and is a family company owned and operated by the Kelton family. Apart from Mr Kelton, his wife, mother and father, are directors of the company. (b) The defendant is a general plumbing, drainage and gas fitting repair and maintenance business which provides services to residential properties managed by real estate agents, strata buildings including home units, townhouse complexes and various manufacturing industries. An on call emergency service on a 24 hour seven day a week basis is provided to the defendant's customers. (c) At the time of the incident, the defendant employed six tradesmen, excluding Mr Kelton and other members of his family employed in the business and was training two apprentices. At the present time the defendant employs three tradesmen and is training one apprentice. (d) Upon work being booked, a tradesmen is allocated to do the work and is required to complete a standard Eveready Plumbing Job Sheet. This job sheet stipulates that work is not to commence until: (i) A job specific work method statement has been completed; (ii) A written risk assessment for the job has been completed; (iii) A hazard inspection check list has been completed. The check list identifies the following high risk tasks which require special consideration: 1 Working in a confined space; 2 Working at heights over 2 metres; 3 Working in an excavation over 1 metre deep; 4 Hot work around existing services; 5 Working in an excavation and working around existing services; 6 Demolition work around existing services; and 7 Any other high risk tasks. (e) It is the defendant's policy that if any high risk tasks are identified, the work must not start until the management of Eveready has been notified and specific instructions given. There are no exceptions. If a high risk task is identified, Mr Kelton is contacted and the appropriate course of action and safety measures are determined and implemented. (f) The procedures referred to above are a development of the system that was in place at the time of the incident. Some of the documentation referred to above was amended after the incident. (g) In respect of the incident on 4 December 2002, Mr Kelton stated that prior to the commencement of work by Mr Campbell, in compliance with the system then in place, Mr Campbell completed an Eveready Safe Work Methods Statement, an Eveready Plumbing Hazard Inspection Checklist and a Risk assessment. (h) At the time of the incident, Mr Campbell was a tradesman with approximately nine years experience and had been trained in confined spaces work, as well as the use of oxyacetylene torches. (i) The task of repairing the water pipe was assigned by Mr Campbell to Mr Richardson as part of his ongoing, on the job training as an apprentice. (j) At the time of the incident, the defendant had not developed a written safe work method statement for the specific task of performing oxyacetylene work in an excavation but instead relied upon separate work safe procedures for hot work as contained in the defendant's Occupational Health and Safety Handbook and Safe Work Method Statement for that job. (k) Five days after the incident, on 9 December 2002, a notice to all employees and sub-contractors was issued, amending and expanding the defendant's existing procedure on assessing risks associated with work in excavations around existing services. (l) This notice was followed up by the release of Work Method Statement No 9 (referred to earlier) which reiterated the issues raised in the notice and formalised the incorporation of procedures into the Occupational Health and Safety Policy. (m) After the incident, the following changes were made to the Occupational Health and Safety Management Systems and Procedures: (i) The changes referred to above; (ii) The standard Eveready Plumbing job sheet was amended to incorporate details of the company's standard OH&S requirements. It included a direction to "think safety", identify and eliminate risks and hazards; (iii) The defendant's inspection check list was expanded to identify gas pipes as a fire hazard. It requires all services in the working area to be isolated and that the check list be completed to determine if the area of work is a confined space; (iv) The defendant's Job Specific Work Method Statement was upgraded to include additional items under high risk tasks; express questions such as "Will you need to isolate services, e.g. gas, electricity, water or other"; and incorporated a confined space checklist to assist in clear identification of a confined space. If a confined space or any other high risk task is identified the company policy now requires management to be contacted before commencing any work; (v) The daily run sheet issued to all tradesmen on each day of the week now has a Safety First reminder stating: "No job is that urgent or that important to compromise the safety of any employee of Eveready Plumbing and Maintenance Pty Ltd or the general public. If our O&HS policies are not or cannot be complied with then the job must not start under any circumstances"; (n) General OH&S training is conducted for the defendant's employees every six months through the Occupational Health & Safety Committee. (o) On average, over the last three financial years, the defendant has spent approximately $13,845 on readily identifiable safety related matters. The expenditure includes training courses, attendance at OH&S meetings by employees, training in the preparations and use of manuals and handbooks, producing and compiling OH&S safety manuals, safety handbooks and documents and the hire of safety equipment. (p) Over the same period, the defendant has spent an estimated $4,200 per year on capital items with a significant safety component, such as new and safer tools, safety equipment, fire extinguishers, safety harness equipment, electrical safety switches, personal protection equipment and safety clothing. (q) The defendant undertakes regular audits to ensure compliance with its OHS management system and statutory requirements. Such audits are conducted every six months. (r) The audits are conducted by Mr Kelton who attends a number of different jobs prior to tradesmen attending and completes Job Specific Work Method Statements, Risk Assessments and Hazard Inspection checklists. Mr Kelton's documents are compared with the tradesmen's paperwork to ensure that all safety issues are being listed and correctly addressed. A similar exercise is undertaken by Mr Kelton in respect of completed jobs. (s) The defendant ceased working for the Strata Management company who managed the accident site and reviewed high risk work carried out for other clients. It decided not to perform certain types of work including working on roofs, guttering, renewals, limited gas work, confined space work, working at heights and hot work in certain situations. (t) The defendant contributes to the community organisation Legacy and carries out plumbing repairs for war widows without including a service call charge. Rates are kept to a minimum. (u) Mr Kelton expressed sorrow at the incident involving Mr Richardson and the injuries he suffered and is striving to ensure that such an incident never occurs again. (v) After the incident, Mr Richardson was visited in hospital by Mrs Roslyn Kelton and he was advised that he could contact the defendant day or night if he needed anything whatsoever. (w) The defendant maintained regular contact with Mr Richardson whilst he was off work. (x) Mr Richardson returned to work after approximately six weeks and was paid all his worker's compensation payments. (y) Mr Richardson returned to his pre-injury work duties on 16 January 2003 and the defendant made available to him additional protective clothing. 12 Mr Richardson's evidence can be summarised as follows: (a) He is now employed by the defendant as a full time plumber. (b) There were several services running more or less parallel to each other at the base of the excavation. (c) There was a yellow plastic gas pipe embedded in the opposite wall of the excavation to where Mr Richardson ultimately worked on 4 December 2002. (d) The gas pipe was approximately 900 to 1000 millimetres away from where Mr Richardson was working with the oxyacetylene torch. The gas pipe was also raised approximately 200 to 300 millimetres above the height of which he was working. (e) The gas pipe ran across the excavation at an angle of about 90° to the other pipes. Submissions of the Parties 13 Mr D Jordan of counsel who appeared for the prosecutor commenced his submissions by conceding that mitigation was available to the defendant in this matter. 14 Counsel submitted that due regard must be had to the objective seriousness of the matter, emphasising the defendant's failure was to properly assess the risk and to isolate the gas service. 15 It was submitted that the risk was obviously foreseeable with potentially grave consequences and could have been simply avoided. 16 Mr Jordan acknowledged that this was not a worst category case, but nevertheless amounted to a serious offence. 17 In respect of s 21A(2) of the Crimes (Sentencing Procedure) Act 1999, counsel submitted that in accordance with subparagraph (g), the injuries were substantial and in respect of subparagraph (i), there was an issue in respect of public safety. 18 There were a number of mitigating factors pursuant to s 21A(3) of the Crimes (Sentencing Procedure) Act 1999 that Mr Jordan submitted should be taken into account as follows: (e) The defendant has no record; (or any significant record) of previous convictions. (f) The defendant is of good character. (g) The Court could be satisfied that the defendant was unlikely to re-offend. (h) The defendant had good prospects of rehabilitation which was obvious from the changes to work practices initiated after the accident. (i) The defendant has shown remorse for the offence as is demonstrated in the affidavit of Mr Kelton. (k) A plea of guilty was entered at the earliest opportunity. 19 Mr Jordan acknowledged that in accordance with sentencing guidelines, a discount of up to 25% was available for the utilitarian value of the above matters. 20 It was further submitted that there was a need for general deterrence although it was accepted that any amount imposed in respect of specific deterrence would be less. 21 It was further submitted that the offender has provided assistance to the relevant authorities. 22 Mr Jordan also took the Court to Section 3A of the Crimes (Sentencing Procedure) Act and emphasised that the objective seriousness of the offence should be properly reflected in the sentence. 23 It was further submitted by Mr Jordan that he was unable to refer the Commission to any similar case with comparable facts. 24 The prosecutor sought an order for costs and a moiety. 25 Ms P McDonald of counsel helpfully provided a written outline of the defendant's submissions. Ms McDonald submitted that: (a) The primary factors in the assessment of penalty are the nature and quality of the offence viewed objectively. (b) Subjective factors are subsidiary to the objective factors and should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1998) 90 IR 464 at 475. (c) In Morrison v Powercoal Pty Ltd & Anor (No 3) [2005] NSWIRComm 61, the Full Bench endorsed a statement by Hungerford J in Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388 in which his Honour when discussing the duty of the Court in imposing penalties for offences under the Act and its predecessor said: ... To ensure a level of penalty for a breach as will compel attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety at the workplace. At the same time, the Court has a corresponding duty insofar as a defendant is concerned not to impose such a penalty as would be oppressively high. (d) It was not alleged that the defendant failed to undertake an assessment of the risks but rather that there was a deficiency in the assessment undertaken. (e) The evidence establishes that at the time of the incident, the defendant had established a system for the assessment and management of risks. This system involved employees completing a Risk Assessment, Hazard Inspection Check List and referring to and using Safe Work Method Statements and an Occupational Health and Safety Handbook when planning the work to be undertaken. (f) The defendant had developed in its employees and contractors a culture of assessing and controlling risks. A reference from Mr M Powney of Health Care Manufacturing Group stated that Mr M Campbell had attended its site on numerous occasions over the past 10 years and always assessed the necessity of isolating services before work was undertaken. Mr Richardson's evidence was that the gas pipe was some distance away from where he was working and was embedded in the opposite wall of the excavation. (g) The Safe Work Method Statement completed by Mr Campbell contained a section which drew attention to the employee's need to isolate services, including energy sources, although this section was not completed by Mr Campbell. (h) The existence of this system evidences the defendant's concern and regard for safety which mitigates the seriousness of the offence. (i) In determining the objective seriousness of the offence, the Court will consider that the failure or omission on the defendant's part was not in the nature of a deliberate or intentional disregard for safety. (j) The existence of settled procedures and instructions is a factor which may mitigate against the seriousness of the offence under the Act: WorkCover Authority of New South Wales (Inspector Penfold) v Fernz Construction Materials Ltd [No 2] (2000) 100 IR 23 at 34, Powercoal (No 3) at [83]. Another factor to be taken into account in assessing the objective seriousness of the offence is whether death or serious injury occurred. (k) Although s 21A of the Crimes (Sentencing Procedure) Act provides that an aggravating factor that may be taken into account in determining the appropriate sentence for an offence is whether: (g) The injury, emotional harm, loss or damage caused by the offence was substantial. Mr Richardson was away from work for six weeks as a result of burns to his face, back, right elbow and legs. The burns suffered by Mr Richardson have healed very well and only minimal scarring is present. (l) In respect of the element of general deterrence, it's importance has not been highlighted in this case as it has been in other cases by a demonstration that the contravention involved a failure to observe specific provisions of a statute or to draw attention to particular problems arising in a particular industry: Powercoal (No 3) at [101]. (m) In respect of specific deterrence, it was submitted it is not the situation here that the offender conducts a large enterprise which involves inherent risks to safety (see WorkCover Authority of New South Wales (Inspector Glass) v Kellogg (Aust) Pty Ltd (2000) 101 IR 261) and therefore any element of specific deterrence should be minimal or nil. (n) The defendant's attitude to workplace safety and improved safety following the accident may be relevant to specific deterrence. (o) The extensive and comprehensive measures taken by the defendant together with the defendant's demonstrated commitment to safety suggests that none or a very small amount of the penalty should reflect specific deterrence. (p) The subjective factors pertaining to the defendant are very strong. Relevant to this offence in s 21A(3) of the Crimes (Sentencing Procedure) Act are the following subparagraphs, each of which were acknowledged by the prosecutor: (e) the offender does not have any record of previous convictions, (f) the offender was a person of good character, (g) the offender is unlikely to re-offend, (h) the offender has good prospects of rehabilitation, whether by reason of the offender's age or otherwise, (i) the offender has shown remorse for the offence by making reparation for any injury, loss or damage or in any other manner, (k) a plea of guilty by the offender, (m) assistance by the offender to law enforcement authorities. (q) The defendant has been in operation for over 20 years with no prior convictions and hence has a history of very good industrial citizenship. This is an important matter to be taken into account on sentence: Corinthian Industries (Sydney) Pty Ltd v WorkCover Authority of New South Wales (Inspector Wilson) (2000) 99 IR 159 at 161. (r) The Court has before it a number of testimonials from clients and a previous employee testifying to the good character of the defendant and its reputation as a company that emphasises occupational health and safety. The Court can give positive consideration to the corporate reputation and personal reputation of its directors and find it has probative force to allow a measure of mitigation of penalty (Kavanagh J in WorkCover Authority of New South Wales (Inspector Olive) v Transfield Pty Limited [2001] NSWIRComm 295 at [23]). (s) The defendant is unlikely to re-offend. (t) The offender has shown remorse for the offence by making reparation for any injury, loss or damage, or in any other manner. (u) The defendant has supported Mr Richardson through his stay in hospital and rehabilitation. This support is further reflected in his employment as a tradesman by the defendant once his apprenticeship was finished. (v) The defendant entered a formal plea of guilty at the earliest opportunity and fully co-operated with the WorkCover Authority of NSW. (w) Ms McDonald relied particularly on the evidence of Mr Kelton and the steps taken immediately after the accident which were designed to prevent a recurrence of a similar incident. (x) The defendant undertakes substantial training in occupational health and safety. It has in place an infrastructure to ensure the reinforcement of its policies to employees. Audits are undertaken by Mr Kelton and substantial funds are expended on occupational health and safety. (y) The nature and quality of the offence and the very strong subjective factors requires a penalty at the lower end of the scale. Consideration 26 The primary consideration in sentencing is the gravity of the offence viewed objectively: Lawrenson Diecasting at 474; Fletcher Construction Australia Limited v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66 at 77 - 81. Having determined the relative seriousness of the offence, the penalty to be imposed is that which approximately correlates upon the scale of penalties set by the legislature from zero to the maximum: WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Limited and Anor (No 2) (2000) 99 IR 163. The maximum penalty in this case is $550,000. 27 Matters that are relevant to the consideration of the objective seriousness of the offence are the nature and quality of the offence and whether it involved obvious or foreseeable risks, whether there were simple and straightforward steps available to remedy any failures on the part of the defendant and, the practical and potential consequences flowing from the commission of the offence including whether injuries sustained by an employee or person manifested the degree of seriousness of the relevant detriment to safety. The Court is also required, in fixing any penalty, to consider the need for both general and specific deterrence: Capral Aluminium Limited v WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610; 99 IR 29 at [71]-[80]. 28 A secondary consideration is the subjective features of the offence, that is, the facts concerning the offender. This will assist the Court in determining whether any penalty justified by the objective circumstances of the offence should be modified. The penalty to be imposed must generally be such as to compel attention to occupational health and safety generally so as to ensure that workers whilst at work will not be exposed to risks to their health and safety: Fisher v Samaras at 388; Capral Aluminium; Morrison v Powercoal (No 3). 29 In considering the nature and quality of this offence, the Full Bench of the Industrial Relations Commission in Court Session in Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 at 339 stated: ... The penalty must reflect the nature and quality of the particular offence; the level of penalty must, on the one hand, compel attention to occupational health and safety risks in order to ensure that persons are not exposed to such risks at their workplaces but, on the other, must not be oppressively high. 30 The charge and the particulars of the charge establish the parameters in which the objective seriousness of the offence should be considered by the Court: Morrison v Powercoal (No 3) at [76]. 31 The particulars of the charge allege the defendant failed to properly assess the risks of using oxyacetylene equipment to cut and solder a water pipe in an excavation and to ensure exposed services including communications, electricity and gas were properly isolated before oxyacetylene equipment was used. 32 The particulars focus on the failure of the defendant in its assessment of risks associated with the work and the inadequacy of the risk assessment. 33 The defendant is not charged with failing to undertake an assessment of the risks but rather that there was a deficiency in the assessment undertaken. The risk in this matter, in my view, was obvious and foreseeable. Using an oxyacetylene torch in a confined space, without properly isolating a gas service, had the potential to cause serious injury. 34 In this matter, although the defendant had a Job Specific Safe Working Methods Statement which asked the question "Will you need to isolate services, e.g. gas, electricity, water or other?", that question had been left unanswered by Mr Campbell. 35 In my view, the defendant had not turned its mind properly to the risk assessment. The risk could have been simply avoided by requiring the service to be isolated. The Work Methods Statement of the defendant, being numbered 8 and entitled "Use of Oxyacetylene" at the time of the accident, did not contain a direct reference to services in an excavation. 36 After the accident, the defendant introduced a Work Methods Statement entitled "Working in Excavations Around Existing Services". This Work Statement requires that prior to carrying out any excavation, a "Dial before you dig" search needs to be carried out to determine if any known services are present in the area to be excavated. The Work Methods Statement provides in paragraph 4: If services are known to exist in the excavation area they MUST BE ISOLATED prior to excavation by the appropriate authority. 37 The safety system relied upon by the defendant which, in my view, was both impressive and commendable was nevertheless clearly deficient in respect of assessing risks associated with working in excavations which contained existing services. 38 The evidence establishes that at the time of the incident the defendant had developed a system for the assessment and management of risks. This system involved employees completing a risk assessment, hazard inspection checklist and referring to and using Safe Work Methods Statements and an Occupational Health and Safety Handbook when planning the work to be undertaken. 39 On the day of the incident, Mr Campbell noted the presence of other services, however, he considered that he and Mr Richardson could work safely in their vicinity. Mr Campbell was a very experienced tradesman who had received training in confined spaces, including the necessity for isolating services. So much was confirmed by Mr M Powney from the Health Care Manufacturing Group who Mr Campbell had carried out work for over a period of 10 years. 40 As I have observed, Mr Campbell completed the Risk Assessment documentation which is linked to other parts of the defendant's occupational health and safety system, such as Work Methods Statements and the defendant's Occupational Health and Safety Handbook. All employees of the defendant are issued with a safety folder which they carry in their vehicles at all times which contains the above documentation. 41 I accept that the existence of this system evinces the defendant's concern in regard for safety and militates the seriousness of the offence. The defendant had a system in place, however, as evidenced by its plea of guilty, there was a deficiency in the system. The failure or omission on the defendant's part, in my view, was not in the nature of a deliberate or intentional disregard for safety. 42 Evidence of procedures and instructions for employees and contractors to follow may mitigate against the seriousness of the offence under the Act. In WorkCover Authority of NSW (Inspector Penfold) v Fernz Construction Materials Ltd [No 2] (2000) 100 IR 23 at [34], Walton J, Vice-President observed: On the other hand, the seriousness of the offence must be assessed in light of the policies and procedures which the defendant had in place. The existence of settled safety procedures and instructions is a factor which may mitigate the seriousness of an offence under the Act: see Warman International Ltd v WorkCover Authority (NSW) (1998) 80 IR 326 at 342; WorkCover Authority (NSW) (Inspector Riley) v Broken Hill Proprietary Co Ltd (1998) 83 IR 427 at 429 and Department of Mineral Resources (Inspector McKensey) v Kembla Coal at (25). 43 The issue discussed by the Vice-President was confirmed as being an appropriate consideration to take into account by the Full Bench in Morrison v Powercoal (No 3) at [83]. 44 I accept that the defendant had implemented, prior to the accident, an array of measures which were designed to protect its employees from injury whilst carrying out plumbing work. These measures included the Methods Statement and Hazard Inspection Checklist and Risk Assessment documentation. 45 The defendant had clearly gone to some lengths to develop in its employees and contractors a culture of assessing and controlling risks. 46 The "Daily Run Sheet", which is now issued to all tradesmen on each day of the week, contains a notation at the bottom in the following terms: SAFETY FIRST Remember: No job is that urgent or that important to compromise the safety of any employee of Eveready Plumbing & Maintenance Pty Ltd. or the general public. If our O.H.&S. policies are not or cannot be complied with then the job must not start under any circumstances! 47 The occurrence of the accident in this case indicates the procedures were not sufficiently comprehensive or sufficiently communicated to and understood by the employees to ensure their safety. The existence of a system on paper alone is clearly not sufficient to comply with the obligations imposed by the Act. The employer is required to ensure that its "paper systems" are implemented and maintained in its daily operations: Sydney County Council v Coulson (1987) 21 IR 477 at 480; WorkCover Authority (NSW) (Inspector Tyler) v Abigroup Contractors Pty Ltd (2000) 99 IR 196 at 214. 48 As Walton J Vice-President observed in WorkCover Authority of New South Wales (Inspector Barbosa) v Newstart 150 Pty Ltd (t/a Style Wise Interiors) (2002) 113 IR 78 at [87]: [87] ... the presence of young and inexperienced persons in the workforce gives rise to an increased responsibility on the part of an employer to ensure adequate training is provided, particularly as to matters concerning the occupational health and safety of those persons. 49 A further factor that should be taken into account in assessing the objective seriousness of the offence is whether death or serious injury occurred. Mr Richardson suffered burns to his face, back, right elbow and legs as a result of the explosion. Mr Richardson was away from work for six weeks as a result of his injuries but has now returned to work on full duties. The burns have healed very well and only minimal scarring is present. 50 The seriousness of an injury does not dictate the size of any penalty but it does demonstrate the seriousness of the detriment to safety occasioned by the offence: WorkCover Authority (NSW) v Wonar Pty Ltd (unreported, Industrial Court, NSW, No 1214 of 1990, Fisher CJ, Glynn and Cullen JJ, 30 June 1992 (at 9)); Lawrenson Diecasting; Tyler v Sydney Electricity (1993) 47 IR 1 at 5. 51 In Morrison v Powercoal Pty Ltd (2003) 130 IR 364, the Full Bench Wright J President, Walton J Vice-President, Boland J stated at [33]: [33] Thus, it may be the case that an employer prosecuted under s 15 of the Act was aware of a serious risk to the health and safety of its employees but took no action to eliminate the risk, notwithstanding that simple and straightforward remedial steps were available. The gravity of such an offence, despite the fact no one was injured and having regard to relevant subjective factors, might be assessed at the high end of the range of penalty available to be imposed on the offender. On the other hand, another employer may have had a good safety record, a safe system of work in place, provided a high level of training, instruction and supervision but through a combination of inadvertence on the part of an employee and a momentary lapse in supervision, a fatality occurs. The assessment of the objective seriousness of the offence could conceivably be at a level lower than that applied to the first employer and, having regard also to subjective considerations, might attract a lower penalty. Importantly, however, in the latter example, the occurrence of death may indicate that the risk to which the deceased employee was exposed, despite the employer's demonstrable commitment to providing a safe workplace, represented a serious detriment to safety deserving of a higher penalty than otherwise might be the case. 52 This is a matter which, in my view, could properly fall within the second example referred to by the Full Bench in the above decision. 53 The defendant is entitled to rely upon subjective factors. I accept the defendant has a strong commitment to occupational health and safety and gives such matters priority in the conduct of its business. 54 Section 21A(3) of the Crimes (Sentencing Procedure) Act 1999 provides for mitigating factors to be taken into account in determining the appropriate sentence. 55 The prosecutor conceded that relevant for these proceedings are the following subparagraphs: (e) the offender does not have any record of previous convictions; (f) the offender was a person of good character; (g) the offender is unlikely to re-offend; (h) the offender has good prospects of rehabilitation, whether by reason of the offender's age or otherwise; (i) the offender has shown remorse for the offence by making reparation for any injury, loss or damage or in any other manner; (k) a plea of guilty by the offender; (m) assistance by the offender to law enforcement authorities. 56 The defendant has been in operation for over 20 years and has no prior convictions. I therefore find that the defendant has a history of very good industrial citizenship which is an important matter to be taken into account on sentence: Corinthian Industries at 161 where the Full Bench, Wright J President, Walton J Vice-President and Hungerford J said at [16] - [17]: [16] ... Perhaps more significantly, there are quite significant subjective features in this matter which appear to have not been taken into account or sufficiently taken into account. [17] We do not consider that the history of good industrial citizenship of the appellant, having regard to its prior record and the long period of operation of its business, was sufficiently taken into account. We also refer to the careful and compassionate steps taken by the appellant as to the welfare, rehabilitation and continuing employment of the injured worker. The reason we have made specific reference to that latter matter is that it does not seem to have been often referred to in other judgments in this area. 57 In addition, the Court has before it a number of testimonials from clients and a previous employee testifying to the good character of the defendant and its reputation as a company that emphasises occupational health and safety. Two clients of the defendant were present in Court during the sentencing hearing. 58 In Transfield Pty Limited at [23], Kavanagh J observed: [23] I find the court can give some positive consideration to the corporate reputation and personal reputation relied upon and find it has some probative force sufficient in my consideration to allow a measure of mitigation of penalty. 59 In my view, the defendant has exhibited a responsible attitude to issues of safety and has taken significant steps to implement occupational health and safety procedures which is reflected in the defendant's record. 60 The defendant is undoubtedly entitled to credit for its swift actions aimed at ensuring that an accident similar in nature does not occur in the future. In Tyler v Sydney Electricity, Hill J said at 5: The gravity of the damage or injury actually resulting from breach does not, of itself, dictate the amount of penalty. However, the gravity or otherwise of the potential risk flowing from breach and its foreseeability are clearly relevant as are the measure of gravity of the breach itself and the measure of culpability. These considerations are, of course, not exhaustive and, amongst other things, the record of the defendant and its conduct in relation to the taking of safety precautions both prior and subsequent to the breach are also very relevant. 61 The defendant further refined its existing safety policy to provide that if any high risk tasks are identified, the work must not start until the management of the defendant has been notified and specific instructions given. There are no exceptions. If a high risk task is identified, Mr Kelton, the Managing Director, must be contacted and the appropriate course of action and safety measures determined and implemented. 62 In addition, the defendant ceased working for the strata management company which managed the property where the incident occurred as it managed numerous properties in newer areas with the consequence that the defendant potentially may come across the same situation as occurred on 4 December 2002. 63 The defendant also conducted a review of its customers and an assessment of the work performed for these customers was undertaken. If the assessment revealed that the work was predominantly high risk work, the defendant ceased working for those particular customers as it was decided that the best management plan was to eliminate the necessity to carry out higher risk work where possible. 64 Furthermore, the defendant reviewed the type and extent of services provided to their remaining customers and decided no longer to perform certain types of work in the majority of cases. This work included working on roofs; guttering renewal; limited gas work; confined space work; working at heights and hot work in certain situations. 65 The defendant introduced a further policy that no work whatsoever is to be carried out if a plastic gas pipe is present in the vicinity of the work area. If high risk tasks are identified and unavoidable, these tasks are to be carried out by Mr M Kelton. 66 The defendant has decreased its employees by not replacing some tradesmen who have resigned. This reflects a decrease in the volume of work received by the defendant but it allows closer management of staff and management of risks. 67 The nature and gravity of the offence may be evidenced by measures introduced by the defendant to safeguard employees from risks after an accident has occurred: WorkCover Authority (NSW) (Inspector Ankucic) v McDonald's Australia Ltd (2000) 95 IR 383 at 439. 68 Mr Jordan for the prosecutor submitted that this matter did not fall into the worst case category. I agree with this submission. 69 I have formed the view that the offence is a sufficiently serious one to bring it between the low to mid range of the scale of culpability. I make clear that the objective seriousness of the offence is moderated by the fact that the defendant did have in place an elaborate set of systems designed to ensure the safety of its employees in their application to this case. However, those systems were not sufficiently clear and detailed particularly in respect of excavation work. The procedures which were in place were also not supported by a secondary layer of safety which has now been introduced. These failings exposed the defendant's employees to risk of serious injury. 70 In assessing penalty, it is necessary that the Court have regard to the need for general deterrence: Capral at 643. 71 In relation to specific deterrence, as the Full Bench observed in Capral at [77], that in view of the scope of the obligations by employers under the Occupational Health & Safety Act, in most cases, it will be necessary to have regard to the need to encourage a sufficient level of diligence by the offender in the future. 72 Ms McDonald submitted that in respect of the element of general deterrence, its importance has not been highlighted in this case as it has been in other cases by a demonstration that the contravention involved the failure to observe specific provisions of a statute or to draw attention to particular problems arising in a particular industry. Ms McDonald relied upon the following passage at [101] of Morrison v Powercoal (No 3) for this proposition. [101] There is plainly a need in this matter to impose a penalty at a level that will draw the attention of those operating in the mining industry to the necessity of engaging in mining practices that conform to all of the requirements of the Occupational Health and Safety Act , particularly the necessity to be pro-active in preventing roof collapse. 73 In my view, general deterrence must be taken into account because, as identified by Hungerford J in Fisher v Samaras at 386, and approved by the Full Bench in Morrison v Powercoal (No 3) the offence is against the statute of public interest and public concern and it is important to compel attention to occupational health and safety issues. 74 It is appropriate that I include in the penalty an element for general deterrence. 75 In respect of specific deterrence, the Full Bench in Capral stated at [77]: [77] In sentencing, a court may disregard the element of specific deterrence if satisfied that the risk of re-offending is low or non-existent. The Court may form such a view as a result of the rehabilitation of the offender: R v Corner (unreported, CCA, 19 December 1997) or because the offender will not have the opportunity to commit a similar offence in the future: R v Macdonell (unreported, CCA, 8 December 1995). 76 It is not the situation here that the defendant conducts a large enterprise which involves inherent risks to safety. In this matter, the defendant has undertaken an extensive and comprehensive review of its occupational health and safety policies. This review has resulted in it discontinuing to carry out work for certain clients and furthermore to discontinue carrying out work which could be described as high risk, as set out in paragraphs 62 and 63 above. 77 In my view, this is an unusual case where I am satisfied that the risk of re-offending is extremely low as a result of the extensive and comprehensive measures taken by the defendant, together with a demonstrated commitment to safety. I therefore determine that a very small element of the penalty should reflect specific deterrence. 78 The defendant treated the incident with extreme concern and formally addressed its concern and remorse for the incident. Its contrition is further demonstrated by the early indication of a plea of guilty. The defendant also has supported Mr Richardson throughout his stay in hospital and his rehabilitation. This support is further reflected in his employment as a tradesman with the defendant once his apprenticeship was finished. This conduct was the subject of specific comment by the Full Bench in Corinthian Industries as an appropriate matter to take into account in sentencing. The defendant also co-operated with the WorkCover Authority in its investigation following the accident. This is another factor which should be taken into account in assessing the subjective features of the offence. 79 The defendant is therefore entitled to the full discount of 25 percent for the utilitarian benefits of its plea: R v Thomson, R v Houlton (2000) 49 NSWLR 383. Giving due regard to the various mitigating factors discussed earlier in these reasons, I would allow a further discount of any fine of 10 percent which will result in a total discount of 35 percent. 80 Having regard to the summons in IRC No 4774 of 2004, the particulars of the offence, statement of agreed facts and the evidence tendered in these proceedings, I am satisfied that the offence has been proven and that the plea of guilty has been properly made by the defendant. A verdict to that effect is entered against the defendant. 81 The defendant has demonstrated an impressive safety record and a conscientious approach to the safety in the workplace. However, in my view, there was an obvious risk to safety which was likely to cause and did in fact cause injury. 82 For the reasons given above, I consider an appropriate penalty with regard to the offence under s 8(2) of the Act, after allowing for a discount of 35 percent, is a fine of $60,000. The penalty to be imposed would have been significantly greater had it not been for the subjective factors I have mentioned, particularly the plea of guilty, the defendant's demonstrated contrition, good record of industrial citizenship, its long period of operation, and its co-operation with the WorkCover Authority. The prosecution should have a moiety of the fine. ORDERS The Court makes the following orders: 1. The offence is proven and a verdict of guilty is entered in this matter. 2. The defendant is convicted of an offence under s 8(2) of the Occupational Health & Safety Act 2000. 3. In matter No IRC 4774 of 2004, the defendant is fined the sum of $60,000 with a moiety of that fine to the prosecutor. 4. The defendant shall pay the prosecutor's costs of these proceedings in a sum as agreed, or, 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.