Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Patton v Hansen Yuncken Pty Ltd [2002] NSWIRComm 314 PROSECUTOR: Inspector John Patton PARTIES : DEFENDANT: Hansen Yuncken Pty Ltd (ACN 063 384 056) FILE NUMBER: IRC 6898 of 2001 CORAM: Schmidt J CATCHWORDS : Occupational Health and Safety - prosecution under s16(1) of the Occupational Health and Safety Act 1983 - building industry - early plea of guilty - first offence - failure to provide fall protection for workers performing formwork removal - contrition - defendant guilty of charge - penalty imposed Construction Safety Regulation 2001 LEGISLATION CITED : Occupational Health and Safety Act 1983 Occupational Health and Safety Act 2000 R v Sharma [2002] NSWCCA 142 CASES CITED : R v Thomson, R v Houlton (2000) 49 NSWLR 383 Ridge Consolidated Pty Ltd v Mauger [2002] NSWIRComm 108 HEARING DATES: 11/20/2002 DATE OF JUDGMENT: 11/29/2002 PROSECUTOR: Mr D O'Neil of counsel SOLICITORS: Legal Services Branch WorkCover Authority of New South Wales LEGAL REPRESENTATIVES: DEFENDANT: Mr AB Gotting of counsel SOLICITORS: Watkins Tapsell JUDGMENT: - 15 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Schmidt J DATE: 29 November 2002 MATTER NUMBER IRC 6898 OF 2001 INSPECTOR JOHN PATTON v HANSEN YUNCKEN PTY LTD Prosecution under s16(1) of the Occupational Health and Safety Act 1983 JUDGMENT 1 This prosecution was brought under s16(1) of the Occupational Health and Safety Act 1983. The defendant pleaded guilty to the breach alleged: 'that the defendant, Hansen Yuncken Pty Ltd (ACN 063 384 056), an employer, breached Section 16(1) of the Occupational Health and Safety Act 1983 on 25 November 1999, at premises located at 4 Alfred Street, Milsons Point in the State of New South Wales ("the premises"), in that it failed to ensure that persons not in its employ and in particular Ilijia Oroz and Ante Stipic, were not exposed to risk to their health or safety arising from the conduct of the defendant's undertaking in that it, the defendant, failed to: (a) ensure that there was physical fall protection for the said Ilijia Oroz whilst he was performing formwork removal at the premises. (b) ensure that there was a safe and suitable fall arrest system for the said Ilijia Oroz whilst he was performing formwork removal at the premises. (c) prohibit the said Ilijia Oroz from accessing, by a wooden bridge, the grandstand terrace of the premises by a wooden bridge. (d) ensure that there was physical fall protection for Ante Stipic whilst he was performing formwork removal at the premises. (e) ensure that there was scaffolding in the area that Ante Stipic was working when he was working at the premises at the air handling unit wall. (f) direct Auburn United Formwork Pty Ltd (ACN 002 187 162) ("AUF") to remove the wooden bridge which allowed access to the grandstand terrace at the premises (g) cause AUF to remove the wooden bridge which allowed access to the grandstand terrace at the premises. (h) ensure that AUF provided it, the defendant, with a site specific risk assessment prior to AUF commencing work at the premises. (i) ensure that AUF had conducted a site specific risk assessment prior to AUF commencing work at the premises.' 2 An agreed statement of facts was tendered and the defendant called evidence from John Gerard Wilson, its technical services manager, who was not required for cross examination. Various documents were also tendered, including a statement outlining the serious injuries suffered by Mr Oroz. The agreed Statement of Facts provided: 1. At all material times the Prosecutor was an Inspector appointed by the WorkCover Authority of New South Wales under Division 4 Part 3 and empowered by Section 48 of the Occupational Health & Safety Act, 1983 to institute proceedings in this matter. 2. At all material times the Defendant was head contractor for the North Sydney Olympic Pool redevelopment at 4 Alfred Street, Milsons Point. 3. On or around 26 August 1999, the Defendant contracted with Auburn United Formwork Pty Limited (ACN 002 187 162) ("AUF") for AUF to perform the entire formwork works for the North Sydney Olympic Pool redevelopment. 4. As at 25 November 1999, AUF employed Ilijia Oroz and Ante Stipic. 5. On 25 November 1999 Ilijia Oroz ("the injured worker") and Ante Stipic were stripping a horizontal timber brace supporting formwork to a vertical wall. The wall was part of a room known as the "Air Handling Unit Plant Room". 6. The injured worker was standing on the rear of the old grandstand terrace, which had an exposed edge. Mr Stipic was standing on top of the wall of the Air Handling Unit. 7. There was a 5 metre deep and 4.4 metre wide void between the rear of the grandstand terrace area and the Air Handling Unit. 8. The timber brace which Messrs Oroz and Stipic were removing spanned this void. 9. As Mr Stipic was stripping the timber brace, his end of the brace fell to the mezzanine level below. The injured worker was then seen to fall from the top of the old grandstand terrace area to the concrete floor of the mezzanine area ("the Incident"). 10. The Defendant did not instruct the injured worker or Mr Stipic to strip the formwork, which they stripped on 25 November 1999. 11. The supervisor of the injured worker and Mr Stipic was Roger Day, an employee of AUF, who was present on the site on 25 November 1999. 12. At the time of the Incident neither the back edge to the rear of the old grandstand terrace nor the Air Handling Unit had any physical fall protection in place. 13. At the time of the incident neither the injured worker nor Mr Stipic were wearing a safety harness nor any other form of fall arrest. 14. The injured worker accessed the rear of the grandstand area over a wooden bridge. The bridge was erected for a period of time. The time in which the bridge was erected is the subject of dispute and evidence will be submitted in relation to this period of time. The bridge was built by representatives of AUF and placed in position by representatives of AUF. 15. There was in place on site a nominated means and procedure of accessing the rear grandstand terrace area. The means was a gate under key, which prevented access to the rear of the grandstand terrace area. The procedure involved persons who wanted access to the rear grandstand area approaching an officer of the Defendant for the key to the gate, at which time the person was provided with a safety harness. The use of the bridge allowed the avoidance of the procedure. 16. As a result of the fall, the worker suffered injuries which will be fully detailed at the plea hearing. 17. When the Defendant contracted with AUF, the Defendant had in place its Project Management Plan. 18. Pursuant to the Project Management Plan, the Defendant required sub-contractors to provide Safe Work Method Statements ("SWMS") which as a minimum complied with the requirements of the Defendant's SWMS. 19. In order to provide an appropriate SWMS, it is necessary to conduct a site specific risk assessment. 20. The Defendant had identified structural work as one of the areas requiring detailed SWMS. 21. AUF provided the Defendant with a Safety Plan and a SWMS on or about 15 October 1999. A copy of the Safety Plan and SWMS is annexed. The Safety Plan and the SWMS refer to the control measures for working in elevated positions and to the requirements for safety belts and life lines to be provided and used by employees working on elevated surfaces. 22. It is alleged that the Defendant, Hansen Yuncken Pty Ltd (ACN 063 384 056), an employer, breached Section 16(1) of the Occupational Health & Safety Act 1983 on 25 November 1999, at premises located at 4 Alfred Street, Milsons Point in the State of New South Wales ("the premises"), in that it failed to ensure that persons not in its employ and in particular Ilijia Oroz and Ante Stipic, were not exposed to risk to their health or safety arising from the conduct of the Defendant's undertaking in that it, the Defendant, failed to: (a) Ensure that there was physical fall protection for the said Ilijia Oroz whilst he was performing formwork removal at the premises; (b) Ensure that there was a safe and suitable fall arrest system for the said Ilijia Oroz whilst he was performing formwork removal at the premises; (c) Prohibit the said Ilijia Oroz from accessing, by a wooden bridge, the grandstand terrace at the premises; (d) Ensure that there was physical fall protection for Ante Stipic whilst he was performing formwork removal at the premises; (e) Ensure that there was scaffolding in the area that Ante Stipic was working when he was working at the premises at the air handling unit wall; (f) Direct AUF to remove the wooden bridge which allowed access to the grandstand terrace at the premises; (g) Cause AUF to remove the wooden bridge which allowed access to the grandstand terrace at the premises; (h) Ensure that AUF provided it, the Defendant, with a site specific risk assessment prior to AUF commencing work at the premises; and (i) Ensure that AUF had conducted a site specific risk assessment prior to AUF commencing work at the premises, as required by the contract. 23. Annexed hereto are ten photographs reference IT numbered 4, 7, 13, 14, 23, 24, 25, 26, and 31. 3 While in paragraph 14 of the statement it was noted that there was a dispute as to the length of time the bridge there referred to was in place, it was accepted for the purpose of these proceedings, that the bridge had been in place for a period of about two weeks. 4 The defendant is a building and construction company established in Victoria in 1981. It operates in that industry throughout Australia and in New South Wales, acquired a business in 1989, which had itself been in operation since 1958. The defendant is engaged in approximately 8 buildings a year, ranging in value from $1million to tens of millions of dollars. Over the last 10 years some 2,000 people have worked on buildings it has erected, although it is the direct employer of only some 200 people nationally, 45 in New South Wales. Most of its current projects are valued in excess of $5million and take from six to thirty six months to complete. 5 The evidence showed the defendant's considerable commitment to safety prior to this accident. This was its first offence, having some years ago successfully defended a prosecution brought against it. The defendant had detailed safety objectives documented in its Business Plan, which were reviewed monthly and in which its employees were inducted. Safety reports were prepared monthly and formed the basis of an annual safety performance report. The defendant was certified by the NSW Government as one of approximately 25 best practice contractors' and was the subject of regular audit by the Department of Public Works, prior to renewal of that certification. It has also been the subject of regular audit by the WorkCover Authority and the evidence showed co-operation with that body, when improved safety practices were required from time to time at sites inspected. The defendant has also been active in safety initiatives of the Master Builder's Association and with relevant industry unions. 6 Since 1995 the defendant had operated an integrated management system manual for quality, safety and environmental issues. It had general safety policies in place and had also developed specific project management plans for each project, which addressed specific site safety issues. It was this process which identified the safety issues existing at that part of the worksite, where this accident occurred. Site specific inductions were also conducted for all workers on particular sites. The form workers involved in this accident had in fact undertaken that induction. Each site also had a safety committee, which included representatives of the defendant and subcontractors working on site. A site safety officer was also always employed. Site inspections were also regularly conducted by Mr Wilson. 7 Prior to the accident, the defendant subjected its management systems, including as to safety, to a process of continuous review and improvement, undertaken on a monthly basis by senior management. Project manager meetings also addressed safety matters on an approximately monthly basis. Site meetings were also regularly conducted to address safety matters. 8 The defendant was the head contractor of the redevelopment of the North Sydney pool. It subcontracted formwork to AUF, which supplied it with a safety plan for use at the project. A review of the plan showed, however, that it was not site specific, but had been prepared for another AUF project. 9 The evidence showed that Mr Oroz, an AUF employee, was working with Mr Stipic stripping formwork at the mezzanine level, a part of the site which the defendant had identified as potentially hazardous. As part of the project management plan for this site, the defendant had conducted a risk analysis, in conjunction with its subcontractors. This process had identified a risk of injury if a person fell from the terrace or mezzanine area, where Mr Oroz and Mr Stipic were working. As a result, a metal mesh safety fence had been erected by the defendant, to restrict access to this area. A gate was installed in the fence, which was kept padlocked. The key was held by one of the defendant's employees. Warning signs were also placed on the fence, which alerted those entering to the danger of that area and the need to wear a safety harness when working there. Safety harnesses were available on site. The defendant envisaged that those working in the area would enter through the gate and would affix the safety harnesses to support available for that purpose in the area. 10 The effect of AUF's erection, by AUF of the timber bridge, was to circumvent the steps taken by the defendant to restrict access to the area where the accident occurred. Access was thereby gained without the necessity to go through the gate. 11 Mr Oroz was not wearing the available safety harness at the time of the accident. How he came to fall was not clear on the evidence. It showed, however, that use of the safety harness would have prevented the fall. 12 The evidence also showed that AUF's erection of the timber bridge had come to the defendant's attention prior to the accident, but the risk to safety thereby created had not been attended to. The defendant had established a safety committee on the site. That committee conducted weekly inspections and produced reports as to action to be taken. While those reports do not specifically mention the bridge, the report in relation to the inspection conducted on the morning of the accident noted, amongst other things, that: Item Description Action By Date By Sign Off 14.06 Mezzanine level Rubbish to be moved ASAP Form workers not acting in safe procedures while working ASAP Fencing to be installed ASAP 13 Mr Wilson also understood that verbal warning had been given to the form workers on site, prior to the accident that day, for not working safely in the mezzanine area. After the accident, all persons on site again underwent a full industry and site induction conducted over a period of 5 hours, over a number of days. Sessions were also tailored for non-English speakers. 14 The defendant also gave WorkCover its co-operation in the investigation into the accident, as well as conducting its own review. As a result, both the defendant's project management plan and the integrated management system manual were revisited. New checklists for subcontract work were introduced, in which safety was emphasised. The induction given to workers and the roles and responsibilities of staff for safety, were also reviewed. 15 Risk analysis and production of safe work method statements are now dealt with by the defendant prior to a contract being awarded, at the tender stage. Those processes are overseen by the project manager and are reviewed before work commences. All sites are now equipped with personal protective equipment, contractual arrangements with hirers having been entered by the defendant. Membership and operation of site safety committees have also been reviewed. A systems manager has been appointed to assist the defendant and subcontractors to meet safety legislation obligations. That employee visits all sites, at least once every two weeks. 16 With the introduction of the Occupational Health and Safety Act 2000 and the Construction Safety Regulation 2001, the defendant engaged outside expert assistance to implement a new safety programme, entitled 'Zero Tolerance'. Other industry providers were engaged to assist the defendant in implementation of various other safety programmes. 17 Mr Wilson also gave evidence of various assistance provided by the defendant to the injured worker and his family. 18 It was the submission of Mr O'Neil, of counsel, for the prosecutor that the factual matters relevant to a determination of the objective seriousness of the offence were: '(a) The Defendant allowed AUF to commence work at the site without having provided any site specific risk assessment; (b) The Defendant's failure to ensure that Auburn United Formwork Pty Ltd (ACN 002 187 162) ("AUF") had conducted a proper site specific risk assessment was in breach of the Defendant's own project management plan; (c) The failure to provide fall protection for workers working at a place from which they could be liable to fall a distance of more than 1.8 metres in fact breached the Construction Safety Regulation 73(3); (d) Hansen Yuncken had actual notice of safety issues in the "mezzanine area"; (e) The Bridge had been present for about two weeks; (f) There were three aspects to the breach - lack of proper safe working method statements, presence of the bridge, lack of fall protection; (g) The rear area of the grandstand terrace had been specifically identified as an area where there existed a risk of injury from a fall; (h) The relevant workers were employees of AUF; and (i) Hansen Yuncken had no role to play in the workers performing the task they were performing.' 19 It was argued that there was a grave risk of serious injury, the detriment to safety lying in: ' … the employees working: (a) At a height of about 5 metres; (b) Without any fall protection of any nature; (c) Via access which defeated safety systems in place; (d) On an exposed edge (in the case of Oroz).' 20 The risks attached to the circumstances revealed by the evidence were submitted to have been readily foreseeable, in circumstances where simple and straightforward remedial steps were available to remove them. This was relevant to an assessment of the seriousness of the offence, which was submitted to fall into the upper level of the mid-range. Here, the bridge should have instantly been removed when observed by the defendant and fall arrest equipment utilised in the work performed. It was accepted that factors weighing in the defendant's favour included that it was AUF employees who were the relevant workers and that the defendant had no role to play in the work which they were performing. 21 It was also accepted that there had been an early plea entered, properly leading to a discount in penalty of up to 25%. The steps taken to improve safety were also regarded as relevantly evidencing the defendant's remorse, contrition and a generally healthy attitude to safety. While on one view this was submitted to highlight the ease with which available steps could have prevented the detriment to safety in question, it was also accepted than the defendant was properly to be given credit for the steps taken. 22 The defendant's good safety record was also accepted as properly to be taken into account in fixing penalty, given that it was a commendable record in an industry in which risks were obvious and well known. It was also accepted that the circumstances were such that specific deterrence had but little role to play in fixing penalty. General deterrence, however, remained a feature. The assistance provided to WorkCover and the worker and his family, were also accepted as proper to take into account. It was submitted that a penalty in the high mid-range was appropriate. 23 It was the submission of Mr Gotting, of counsel, for the defendant that the proper range of penalty was at the lower end, given the circumstances of this first offence, in the case of this offender. It was submitted to be relevant that the alleged breach of the Construction Safety Regulation relied upon by the prosecutor had played no part in the particulars of the offence alleged and that the lack of a site specific risk assessment by AUF, had not been demonstrated to have been a causative factor in the detriment to safety which here arose. 24 It was submitted that account would also be taken of the fact that the risk posed at the place where this accident occurred had been identified by the defendant, which had taken appropriate steps to remove it, by installation of a fence, a locked gate and safety harness equipment. It followed that the defendant's culpability would be assessed in a context where the breach of relevant safety obligations here fell not only upon the shoulders of the defendant, but also on those of the direct employer, AUF and a director, Mr Sywak, both of whom had also been charged. It was further noted to be relevant, that: '(a) Mr Oroz and his co-worker, Mr Stipic, were supervised by an employee of AUF, Mr Day; (b) the Defendant did not instruct Mr Oroz or Mr Stipic to perform the working (sic) they were undertaking on the day of the incident; (c) the bridge was built by representatives of AUF; (d) the bridge was placed in position by representatives of AUF; (e) a nominated procedure of accessing the area - involving a lock, a key, an approach to an officer of the Defendant to obtain the key and the issuance of a safety harness - was in existence at the time, albeit the presence of the bridge allowed the avoidance of the procedure.' 25 The mitigating factors relied upon were: '(a) the plea of guilty; (b) the early entry of a plea of guilty; (c) the good industrial record of the Defendant; (d) the good industrial record of the Defendant given the industry in which it operates - the building industry; (e) the good industrial record of the Defendant given the size of the Defendant; (f) the cooperation of the Defendant with the WorkCover Authority; (g) the cooperation of the Defendant with an industrial organisation (the CFMEU); (h) the steps taken by the Defendant to prevent a recurrence of the incident; (i) the speed by which steps were taken by the Defendant to prevent a recurrence of the incident; (j) the practices of the Defendant prior to the incident in respect of occupational and safety (k) the practices of the Defendant after the incident in respect of occupational health and safety; (l) the contrition of the Defendant; (m) the assistance provided to Mr Oroz.' 26 It was common ground that the maximum penalty applicable to this offence was $550,000. Consideration 27 The admitted facts and the evidence here demonstrated that this breach of the onerous obligations imposed upon the defendant by the Act, were properly conceded by the defendant. The defendant accepted that the risk in question was an obvious one, not only foreseeable, but actually foreseen. 28 The proper approach to the imposition of penalty is well settled, requiring the imposition of a penalty which reflects the nature and quality of the offence in question. In the case of a plea such as this, the principles discussed in R v Thomson, R v Houlton (2000) 49 NSWLR 383 are to be followed. (See R v Sharma [2002] NSWCCA 142 and Ridge Consolidated Pty Ltd v Mauger [2002] NSWIRComm 108 at [37]). 29 The evidence was such that it must be accepted that the seriousness of this offence was exacerbated by the fact that the bridge erected by AUF, which circumvented the safety measures put in place by the defendant to preclude the detriment to safety which here arose, had been left in place by the defendant for a period of some two weeks. That the activities of the safety committee which had inspected this site on a weekly basis had not resulted in the defendant having the bridge removed, was plainly an aggravating feature of this offence. Even when, on the day of this accident, the safety problems in the approach AUF was adopting were identified by the safety committee, the defendant failed to act to ensure safety, as it was obliged to do. 30 Safety measures which are devised to ensure safety, but which are not implemented and safety committees which do not operate effectively to ensure that safety measures such as those here devised by the defendant are enforced, ultimately are useless. They neither ensure safety, nor do they ensure that the obligations imposed by the Act are met. 31 I do accept that in fixing penalty proper account is to be taken of the fact that it was AUF which erected this bridge and did not require its employees to utilise the safety equipment available. It is also relevant that AUF had a representative on the safety committee. Nevertheless, the defendant's failings, as it accepted in the plea advanced, were plainly serious and must be so approached. 32 Yet again, this case brings to light a situation where an obvious and foreseeable danger has been identified by a defendant, strategies have been devised to remove the risks presented but they are ignored, with the result that a worker suffered very serious injuries and others were put at risk. Here, it can only have been a matter of good luck, not good management, that the injuries suffered by Mr Oroz were not even more serious than they in fact were. 33 As a result, I accept that while specific deterrence does not play a large role in the proper determination of penalty in this case given the evidence of this defendant's approach to safety matters, both before and after the offence, it must play some part. General deterrence must also play a part. I have so approached the question of penalty. 34 It is disappointing that such a situation presents itself in the case of a defendant which had, on any view, a commendable existing approach to safety, both generally and at this site, before this detriment to safety arose. Its excellent record in this inherently dangerous industry, over very many years, was plainly not just a matter of good luck. That is properly to be taken into account. So, too, is the approach it adopted in response to this accident, both as to the assistance provided to the injured worker and his family, to WorkCover, the unions on site and to a general review of safety at this site and throughout its operations. 35 Having regard both to the objective features of this offence and the other subjective matters properly raised, to which I have referred, I have come to the view that a substantial penalty must flow for this first offence, in the order of $130,000. 36 I also accept that the early plea entered and the other matters properly here raised in mitigation, should result in a total discount of 35%, reflecting both utilitarian savings and contrition. The very considerable and commendable steps taken by the defendant after the accident, which have been described, must be properly reflected in the discount. This discount therefore leads to a proper penalty of $84,500. Orders 37 For the reasons given, I find the defendant guilty of the charge and make the following orders: 1 The defendant is to pay a penalty of $84,500, with a moiety to the prosecutor. 2 The defendant is to pay the prosecutor's costs, as agreed, or in the absence of agreement, as 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. 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.