Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Guillarte v Integrated Group Ltd (formerly known as Integrated Workforce Pty Ltd) [2003] NSWIRComm 98 PROSECUTOR Inspector Corrie Guillarte PARTIES : WorkCover Authority of New South Wales DEFENDANT Integrated Group Ltd (formerly known as Integrated Workforce Pty Ltd) FILE NUMBER: IRC 4172 of 2001 CORAM: Marks J CATCHWORDS : Occupational health and safety - Plea of guilty - Defendant labour hire company - Employee injured while performing work in premises occupied by and in a workplace operated by a client company - Penalty fixed. LEGISLATION CITED : Occupational Health and Safety Act 1983 CASES CITED : Inspector Guillarte v Industrial Galvanizers Corporation Pty Ltd (2002) NSWIRComm 192 Inspector Blume v TMP Worldwide Eresourcing (2003) NSWIRComm 37 HEARING DATES: 03/21/2003 DATE OF JUDGMENT: 04/15/2003 PROSECUTOR Ms P Lowson of counsel SOLICITORS Moray & Agnew LEGAL REPRESENTATIVES: DEFENDANT Mr J Nolan of counsel SOLICITORS Harmers Workplace Lawyers JUDGMENT: INDUSTRIAL RELATIONS OF NEW SOUTH WALES IN COURT SESSION CORAM: MARKS J Tuesday 15 April 2003 Matter No IRC 4172 of 2001 INSPECTOR CORRIE GUILLARTE v INTEGRATED WORKFORCE PTY LTD Prosecution pursuant to s 15(1) of the Occupational Health and Safety Act 1983 JUDGMENT 1 These are proceedings brought by Inspector Corrie Guillarte of the WorkCover Authority of New South Wales against the defendant named in the amended application for order as Integrated Workforce Ltd but now known as Integrated Group Ltd. The prosecutor has charged the defendant with a breach of s 15(1) of the Occupational Heath and Safety Act 1983 ("the Act"). The defendant was charged that on 3 July 1999 at Girraween in the State of New South Wales, being an employer it failed to ensure the health, safety and welfare at work of its employees "and in particular Lasalo Iosefa and Samat Cetin in that it failed to: "A. make arrangements to ensure safety and absence of risk to health of its said employees in connection with the use of an overhead travelling crane in a galvanising plant to transport a structural beam above and across their place of work; and B. provide such instruction and training as was necessary to ensure that the said employees did not perform work in the dressing area of a galvanising plant at risk to their own safety while a large structural steel beam was being transported above and across the dressing areas; and C. ensure that a safe system of work was provided and maintained with respect to the transportation of a large structural steel beam above and across the said employee's place of work in that: 1. The defendant was at all material times on 3 July 1999 an employer. 2. The defendant at all material times conducted its business in New South Wales as a hirer of labour to industry from its business premises at Suite 2, Level 3, 460 Church Street, North Parramatta. 3. At all material times on 3 July 1999 the defendant employed Lasalo losefa and Samat Cetin ("the worker). 4. Pursuant to a contract between the defendant and Industrial Galvanizers Corporation Pty Limited ABN 40 000 545 415) ("the host employer") the services of the workers were let on hire by the defendant to the host employer at all material times as and from 29 April 1999. 5. The host employer conducted the process of galvanizing metal products from its galvanizing plant at 20-22 Amax Avenue, Girraween in the state of New South Wales ("the premises"). 6. The workers were engaged by the host employer to carry out the duties of a steel labourer and i doing so at all material times on and prior to 3 July 1999 while at the premises was under the direct training and supervision of the host employer. 7. At all material times there was situated within the premises an overhead travelling crane which was used for the purpose of transporting metal products around the premises. 8. There was a maintenance platform, for the overhead travelling crane, which platform protruded within the walls of the premises. 9. At all material times there was a metal jig stand which rested upon the floor of the dressing area of the premises and was supported by its own weight but was not affixed to the floor in any way. 10. The said jig stand was at all material times on 3 July 1999 supporting a jig beam, which beam was used to attach metal products to it during the galvanizing process. 11. The jig beam rested on the jig stand and was supported there by the force of its own weight and was not affixed to the jig stand in any way. 12. The workers were at all material times on 3 July 1999 working in the dressing area of the premises near to the jig stand. 13. At all material times on 3 July 1999 Geoffrey Wolfgang Matthew Bischof ("the crane operator") was operating the said overhead travelling crane and was using it to transport a large structural steel beam which measured 15 metres in length and was approximately 1.2 metres wide and weighted approximately 4.7 tonnes. It was being transported above and across the dressing area to the weighing scale. 14. At about 9.50am on 3 July 1999 the structural steel beam was being manoeuvred by the crane operator to position it on the weighing scale when it struck the jig stand and caused it to topple. 15. At the time the jig stand toppled it had the jig beam resting upon it. At the same time Lasalo Iosefa who was near the jig stand was struck by the jig beam which fell to the floor along with the jig stand and the Jig beam landed on the worker and pinned him to the floor of the premises. 16. Lasalo losefa sustained serious injury as a consequence of the Jig beam falling onto him which injuries have prevented him from resuming his normal work for in excess of seven days. 17. At all material times on and prior to 3 July 1999 there was an identifiable risk that the jig stand could topple over if bumped by metal objects being transported by the overhead travelling crane above and across it because the jig stand was not properly secured to the floor of the premises. 18. At all material times on and prior to 3 July 1999 there was an identifiable risk consequent upon the crane operator continuing to operate the overhead travelling crane in transporting a large structural beam even though there were persons working in the dressing area. 19. At all material times on 3 July 1999 the defendant failed to make arrangements to ensure safety and absence of risks to health of its employees in connection with the use of the overhead travelling crane to transport a structural steel beam above and across the dressing area. 20. In view of the identifiable risks associated with the premises at all material times on 3 July 1999 the defendant failed to provide such instruction and training as was necessary to ensure that the workers did not perform work in the dressing area of a galvanizing plant at risk to their own safety while a large structural steel beam was being transported above and across it. 21. At all material times on 3 July 1999 the defendant failed to ensure that a safe system of work was provided and maintained with respect to the transportation of a large structural steel beam above and across the worker's place of work." 2 The defendant pleaded guilty to the charge. An agreed statement of facts was tendered into evidence which was in the following of terms: "1. Inspector Guillarte has authority to bring this prosecution. At the date of the offence the defendant was known as Integrated Workforce Limited (ACN085 701 965), and is now known as Workforce Group Limited (ACN085 701 965) ("the defendant"). 2. In or about September 1998 the defendant, an employer, entered into an arrangement whereby it would supply employees to perform general labouring work to Industrial Galvanizers Pty Limited ( "Industrial Galvanizers" ). 3. The arrangement was verbal but based on the defendant's standard service proposal. 4. The defendant attended at Industrial Galvanizers' site at 20-22 Amax Avenue, Girraween in the State of New South Wales on a number of occasions. The premises comprised an enclosed structure approximately 93 metres long, 22.75 metres wide and 10 metres from the floor to the roof trusses. 5. Industrial Galvanizers is in the business of galvanising steel used for industrial purposes. Galvanization involves dipping steel products in a tank of hydrochloric acid and then into a tank of zinc alumine that is charged with electricity. At Industrial Galvanizers the steel products are weighed before and after galvanisation on industrial scales, and customers are charged a rate based on the weight of the galvanisation. 6. The industrial scales were located near the entrance to the premises. The dipping tanks were located at the opposite end of the premises. An overhead crane operated by a pendant operation was used to move the steel structures across the premises for weighing, dipping and re-weighing. 7 The area on one side of the premises was known as the dressing area, where steel products were placed after galvanisation in order for rough edges to be trimmed or ground. In this area were two jig stands. One was connected to the wall and the other was located away from the wall and consisted of a top metal bar of approximately 13 metres in length, 470 mm in width and with 3 metal posts of approximately 2.35 metres in height. This jig stand was freestanding; it was not bolted to the floor or otherwise supported. 8. The jig stands were used to support a jig beam approximately 5 metres in width and between 1.44 metres and 1.55 metres in length with 23 cross bars. It had four triangular lifting points. It also had a small positioning lip or lug at each end with a downward protrusion of approximately 30 mm – 34 mm. The estimated weight of the jig beam was approximately 300 kgs. Smaller galvanised products were hung from the jig beam and workers removed the rough edges. Industrial Galvanizers also galvanised large steel products. 9. Employees were first supplied by the defendant to Industrial Galvanizers on or about September 1998. Pursuant to the arrangement at that time employees were supplied to perform general labouring work. 10. In or about September 1998 employees of the defendant complained about the lack of safety procedures at Industrial Galvanizers. The defendant again visited the site at Industrial Galvanizers and after undertaking audits was satisfied of the standard of safety. In response to the concerns of some of its employees, the OH&S Coordinator of the defendant attended the site and imposed a restriction upon the use of its employees in an area of the plant. The defendant also threatened to withdraw all of its labour from the site unless identified safety concerns were addressed. Further, it was agreed with Industrial Galvanizers that all of the defendant's employees were to be properly inducted and fully supervised until they were trained and competent. 11. Additionally it was subsequently decided by the defendant that its employees would not work in the "dip" section and that any change in work would be notified to the defendant. 12. On or about 28 April 1999 Lasalo Iosefa commenced employment with the defendant. On or about 29 April 1999 he was offered and accepted work at Industrial Galvanizers as a general hand. Those duties included the work of removing the rough edges from galvanized steel products. This was the work he was performing on 3 July 1999. 13. On or about January 1999 Samat Cetin commenced employment with the defendant, and was offered and accepted work at Industrial Galvanizers where he performed similar work to Mr Iosefa. 14 Mr Iosefa's ordinary hours of work were from 6.00 am to 2.00 pm Monday to Friday. During his employment he usually worked an extra 2 hours overtime per day commencing his work at 4.00 am. In addition on most Saturdays he worked further overtime. 15 Although the defendant had visited the workplace at Industrial Galvanizers and had observed the performance of work in the dressing area it had not observed the use of the mobile crane when moving steel structures in the area. However, the system to be followed when the crane was moving had been fully explained to the defendant. 16. Pursuant to the arrangement with Industrial Galvanizers Industrial Galvanizers was to provide training to Mr Iosefa and Mr Cetin. 17. On Saturday 3 July 1999 Mr Iosefa and Mr Cetin were performing overtime work, cutting and cleaning galvanised tank lids in the dressing area. 18. At least two galvanised structural beam were being galvanized on 3 June 1999, the second of which weighed approximately 4.7 tonnes and measuring 15 metres long x 1.2 metres wide. The crane operator on 3 July 1999 was Geoffrey Bischof. Mr Bischof was supervised and instructed by Peter Aramani in relation to the movement of the first large steel beam using the mobile crane. Mr Aramani left Mr Bischof to move the second beam himself. The defendant relied upon Industrial Galvanizers oral representations that Mr Bischof's was trained. 19 At about 9.50 am Mr Bischof advised Mr Iosefa and Mr Cetin to move out of the dressing area when he commenced moving the steel beam with the mobile crane from the dipping tanks to the weighing scales. 20 The defendant: (i) relied upon Industrial Galvanizers to train Mr Iosefa and Mr Cetin the relevant work procedures; and (ii) was advised by IG that the correct work procedure included the crane operator advising employees to leave the dressing area every time the mobile crane passed over that area. 21 The supervisor Mr Peter Aramini was present on site but not present in the vicinity of the dressing area at the time of the accident. 22 The defendant was advised by Industrial Galvanizers that the correct work procedure was that the employees were to return to work in the dressing area after the mobile crane had passed over the dressing area. Notwithstanding this there were statements by the workers concerned that crane operators did not always notify workers to move out of the dressing area when the mobile crane was in operation and workers sometimes moved out of the area only after seeing that the crane was operating in the vicinity. No employee of the Defendant had reported any departure from the system during the weekly visits by the Defendant's representative to the site. 23 On 3 July 1999 Mr Iosefa and Mr Cetin returned to the dressing area after the mobile crane had passed from the area where they were working but while the mobile crane was still in operation. Shortly after this time Mr Bischof commenced to lower the steel beam for weighing. 24 As Mr Bischof operated the crane either the galvanised steel beam or the chains by which it was suspended came into contact with the jig stand causing the jig stand to collapse and causing the jig beam on the stand to fall. The jig beam fell and struck Mr Iosefa. He sustained a broken pelvis, back injury and wound to left upper arm. 25 Mr Iosefa was in hospital for between 2-3 weeks and did not return to work with the defendant. 26 The defendant (a) had not identified that the freestanding jig stand presented a risk to safety. (b) had conducted a risk assessment through its OH&S Coordinator, but relied upon Industrial Galvanizers to ensure that the established systems were adhered to; but had not ensured that Industrial Galvanizers had undertaken a risk assessment in relation to the movement of large steel structures by use of the overhead mobile crane. (c) had not enquired into the experience, training or qualifications of Mr Bischof specifically as a crane operator but had made inquiries about the training and qualifications of staff generally. (d) had not provided its own training to Mr Cetin or Mr Iosefa in relation to safe procedure when the mobile crane was in use. (e) had not enquired about Industrial Galvanizers' occupational health and safety record, which would have disclosed four convictions between 1991 and 1998. (f) Did not have an adequate system in place to ensure that Mr Cetin and Mr Iosefa were trained in the correct work procedure when steel structures were being moved by mobile crane 27 The defendant did not ascertain whether the system of work for moving steel structures at Industrial Galvanizers was safe with reference to: a. the visibility of the crane operator; the stability of the jig stands, and in particular whether the jig stands were secured to the floor or wall; b. the capacity of the jig stands to withstand contact from a steel beam on the mobile crane; c. the extent, if any, to which the jig beams were secured on to jig stands; 28. The system of work was not safe as (a) the jig stand was at risk of toppling over if bumped by objects being transported by the overhead crane because it was not secured to the floor; and (b) the crane operator continued to operate the crane to transport a large steel structure while people were working in the dressing area." 3 Additional evidence tendered for the prosecution consisted of a number of photographs. The defendant tendered into evidence an affidavit of Robert Stuart Gatti the Area Manager of the defendant. 4 The evidence of Mr Gatti established the following matters: 1. The defendant is a national publicly listed recruitment organisation specialising in industrial recruitment in the labour and staff outsourcing industry. It commenced operations in Perth in November 1992 and currently operates in Queensland, New South Wales, Victoria and South Australia as well as in Western Australia. It has 28 offices throughout Australia. It employs 200 internal staff and 4,000 external staff. In New South Wales it has 35 internal staff and 850 external staff. 2. At the time that Mr Iosefa became employed by the defendant it had in place an induction procedure which included exposure to an occupational health and safety programme. The defendant employed an occupational health and safety coordinator for New South Wales who at the time of the incident which gave rise to these proceedings was Mr Shane Loughrey. He was an experienced occupational health and safety manager. It was among Mr Loughrey's duties to assess the occupational health and safety environment of places of work to which the defendant's employees were allocated. This included, relevantly, Industrial Galvanizers. Between September 1998 and the date of the incident Mr Loughrey attended those premises 15 times. In addition that organisation was visited frequently by the defendant's account manager "whose function was to start up any new staff, assist and ensure inductions took place, collect time sheets and to ascertain if there were any problems at the site." Mr Loughrey as part of his duties walked through the plant operated by Industrial Galvanizers and viewed the defendant's employees performing work there. 3. Mr Loughrey conducted an occupational health and safety site inspection at the Industrial Galvanizers site on 27 January 1999 and completed a form which indicated that he had assessed the general work area, protective equipment utilised, inductions carried out by that organisation, safety procedures, first aid and the like. The report indicates that he arranged that no work was to be carried out by the defendant's employees in a particular section of the plant and that any change of work was to be notified to the defendant. Immediately after the incident, Mr Loughrey attended at the premises of Industrial Galvanizers and made inquiries concerning how the accident occurred. He concluded that: "Contributing factors to the incident were the beam was not in full sight of the operator, persons were in an area affected by beam movement and the racking frames were not bolted to the floor." 4. The defendant has expressed contrition for what has occurred and has made genuine efforts to assist Mr Iosefa and his family. 5. The defendant has a well-developed occupational health and safety policy and has a positive commitment to its occupational health and safety programme. 5 I should add that the circumstances surrounding the accident and the manner in which it occurred were the subject of proceedings before Boland J in this Court in Inspector Guillarte v Industrial Galvanizers Corporation Pty Ltd (2002) NSWIRComm 192. In those proceedings his Honour found that Industrial Galvanizers Corporation Pty Ltd was guilty of an offence under s 16(1) of the Act arising out of the same incident. His Honour's judgment contains a detailed consideration of the circumstances which gave rise to the incident. 6 It was common ground between the parties that the defendant had no prior convictions for any offence under the Act and that the maximum monetary penalty which applied was $550,000. 7 It is first necessary to determine the objective seriousness of the offence. In approaching this matter it is necessary to bear in mind that the defendant is a labour hire company. As such, it requires its employees to perform work in premises occupied and in workplaces operated by its clients. It has long been established that labour hire companies have particular obligations imposed upon them under the Act by reason of their relative lack of control over and supervision of the work performed by their employees for third party clients. The relevant authorities are referred to and appropriately summarised in the judgment of Boland J in Inspector Blume v TMP Worldwide Eresourcing (2003) NSWIRComm 37. There is a positive obligation on labour hire companies to take such steps as are necessary to ensure that the work environment in which their employees are required to carry out work is safe and that those employees are not required to carry out work in circumstances which are unsafe or otherwise pose a risk to their health, safety or welfare. The difficulty this creates for labour hire companies is that they are, in a pragmatic sense, compelled to exercise the same degree of foresight and vigilance as does the third party client, as if the third party client were the direct employer of the labour hire company's employees. This vigilance and foresight must be exercised in circumstances where the labour hire company will rarely have a responsible representative engaged full-time at the third party client premises or otherwise involved full-time in the operations of the third party client. 8 On one view of it, the circumstances of the particular incident which gave rise to these proceedings were reasonably foreseeable given the dimensions and shape of what was being transported by use of the overhead crane, the environment in which the crane was then operating and, in particular, the fact that the racking frame had not been bolted to the floor, thus allowing it to fall over and injure the defendant's employee. So much was found by Boland J in connection with the prosecution against Industrial Galvanizers Corporation Pty Ltd. So much should then follow with respect to the obligation imposed upon the defendant as employer under s 15(1) of the Act. Viewed in this way, the breach by the defendant of the Act is serious. 9 Mr J Nolan of counsel who appeared for the defendant stressed, however, that the seriousness of the offence ought to be ameliorated by the fact that it was the acts and omissions of employees of Industrial Galvanizers Corporation Pty Ltd which constituted the breach by this defendant of its obligations under s 15(1) in the context of the efforts made by the defendant to ensure that the operations of that company were not unsafe. In my opinion the Court is entitled to adopt this approach in the assessment of penalty by reference to the objective seriousness of the offence. I do not understand the prosecutor through its counsel Ms Lowson to have contended differently in that the prosecutor submitted that although the offence was a serious one, a penalty should be imposed at the "lower end of the scale". 10 The defendant pleaded guilty and is entitled to a discount accordingly. However, the prosecutor submitted that the defendant should not be given the full benefit of the usual discount because no plea of guilty was entered until after the determination of the proceedings by Boland J in connection with the prosecution brought against Industrial Galvanizers Corporation Pty Ltd. The defendant advised the prosecutor that it would be pleading guilty immediately after his Honour's judgment was published. In my opinion it was reasonable for the defendant in these proceedings to have awaited the determination of the defended proceedings against Industrial Galvanizers Corporation Pty Ltd because, as I have previously indicated, it was the conduct of that company which constituted to a large degree the circumstances which constituted the offence against the defendant in these proceedings. In these circumstances the defendant should be entitled to a discount of 20 percent. 11 The prosecutor submitted that it was necessary for the Court to take into account both the general and specific deterrent effect of any penalty imposed, In particular, there was public interest in the general deterrence of any penalty imposed in connection with the labour hire industry. I agree that this is a factor which must be taken into account, although I observe that in the case of this particular defendant its commitment to its obligations under the Act render any specific deterrent effect as having less relevance. 12 The prosecutor accepted that the defendant had expressed contrition for what had occurred and that in general terms it had a well-developed occupational health and safety policy and a commitment to its obligations under the Act. These are matters which, in addition to the matters which I have previously referred to are relevant to take into account in assessing penalty. Included in these other matters is the fact that this is the defendant's first offence. 13 Having regard to all the circumstances it is my opinion that the sum of $50,000 is an appropriate penalty to which a discount of 20 percent should be applied for the early plea of guilty, leaving a resultant penalty of $40,000. 14 The prosecutor did not seek any order for costs nor any moiety of the penalty during the hearing. However a letter to my Associate from Ms Lowson, counsel for the prosecutor dated 23 March 2003 was to the effect that the defendant had no objection to such orders being made. Rather than cause the parties to incur further costs I shall act on the basis of this letter. ORDERS 15 I make the following orders. 1. The defendant is found guilty of the offence referred to in the order and is convicted accordingly. 2. The defendant is fined the sum of $40,000, with a moiety to the WorkCover Authority of New South Wales. 3. The defendant is to pay the costs of the prosecutor assessed by the Court in default of agreement. _____________________-- 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.