Industrial Relations Commission of New South Wales in Court Session CITATION : WorkCover Authority of New South Wales (Inspector Penfold) v Fernz Construction Materials Limited [2000] NSWIRComm 99 PROSECUTOR: WorkCover Authorityof New South Wales (Inspector Penfold) PARTIES : DEFENDANT: Fernz Construction Materials Limited FILE NUMBER: 3235 & 3236 of 1998 CORAM: Walton J Vice-President CATCHWORDS : Occupational Health and Safety - admission of evidence in sentencing proceedings - direction as to the application of rules of evidence in sentencing proceedings - nature and seriousness of offence - obvious and serious risk of injury - serious injury - existence of settled safety procedures - procedure not sufficiently comprehensive or communicated - paper systems - uncertainty over procedure - simple and straightforward steps would have prevented accident - steps taken after accident - subsequent steps may evidence the nature and quality of the offence - layers of safety - mitigation due to existing safety systems - subjective features - plea of guilty - lack of prior conviction - conscientious approach to safety - good industrial citizenship - co-operation with prosecutor - contrition - rehabilitation - s 556A of the Crimes Act 1900 - guilty verdict entered - penalty $50,000 Occupational Health and Safety Act 1983 s 15 LEGISLATION CITED : Crimes Act 1900 s 556A Evidence Act 1995 ss 4; 81; 87; and 135 WorkCover Authorityof New South Wales (Inspector Penfold) v Fernz Construction Materials Ltd (1999) 91 IR 119 Department of Mineral Resources of NSW (Inspector McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 Tyler v Sydney Electricity (1993) 47 IR 1 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Schultz v Tamworth City Council (1995) 58 IR 221 Director of Public Prosecutions (Cth) v El Karhani (1990) 21 NSWLR 370 Workcover Authority of NSW (Inspector Peter Ankucic) v McDonalds Australia Ltd and Another (unreported, Walton J, Vice-President, Matter No.'s IRC1104 and 1106 of 1998, 4 February 2000) Wong v Melinda Group Pty Ltd (1998) 82 IR 118 Warman International Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 WorkCover Authority of New South Wales (Insp. Riley) v Broken Hill Proprietary Co Ltd (1998) 83 IR 427 Sydney City Council v Coulson (1987) 21 IR 477 CASES CITED : WorkCover Authority of New South Wales (Inspector Tyler) v Abigroup Contractors Pty Ltd [2000] NSWIRComm 40 Inspector Davies v Supercoat Feeds Pty Limited (unreported, CT96/1020, 22 April 1997) WorkCover Authority of NSW Callaghan v Saunders Constructions Pty Ltd (unreported, Maidment J, CT 93/1062, 26 November 1993) WorkCover Authority of NSW (Inspector Piggott) v Capral (1998) 82 IR 468 WorkCover Authority of NSW (Inspector Kelsey) v University of Sydney (unreported, Hill J, Matter no. CT1280 of 1995, 2 April 1997) WorkCover Authority of New South Wales (Inspector Robins) v Ecolab Pty Ltd (1999) 90 IR 413 Alcatel Australia Limited v WorkCover Authority of New South Wales (Inspector Clyant) (1996) 70 IR 99 Nesmat Pty Limited v WorkCover Authority of New South Wales (1998) 87 IR 312 R v Winchester (1992) 58 A Crim R 345 Huang (1994) 78 A Crim R 111 Department of Mineral Resources of NSW v A M Hoipo & Sons Pty Ltd [2000] NSW IRComm 16 Corinthinian Industries (Sydney) Pty Ltd v WorkCover Authority of New South Wales (Inspector Wilson) [2000] NSWIR Comm 46 WorkCover Authority of New South Wales v Waugh (1995) 59 IR 89 HEARING DATES: 03/22/1999; 10/22/1999 DATE OF JUDGMENT: 06/15/2000 PROSECUTOR: WorkCover Authority of New South Wales Mr Docking of Counsel Solicitor - Mr Greg McCann Senior Litigation Lawyer LEGAL REPRESENTATIVES: WorkCover New South Wales DEFENDANT: Mr Dixon of Counsel Solicitor - Gareth Jolly Senior Associate Minter Ellison Lawyers JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: WALTON J, Vice-President 15 June 2000 MATTER NO. IRC 3235 OF 1998 WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR PENFOLD) v FERNZ CONSTRUCTION MATERIALS LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983. MATTER NO. IRC 3236 OF 1998 WORKCOVER AUTHORITY OF NEW SOUTH WALES (INSPECTOR PENFOLD) v FERNZ CONSTRUCTION MATERIALS LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983. JUDGMENT 1 This matter is a prosecution by Inspector Eric Penfold of the WorkCover Authority of New South Wales of Fernz Construction Materials Limited ("the defendant") for a breach of s15(1) of the Occupational Health and Safety Act 1983 ("the Act"). 2 Section 15 of the Act provides: 15. Employers to ensure health, safety and welfare of their employees. (1) Every employer shall ensure the health, safety and welfare at work of all the employer's employees. (2) Without prejudice to the generality of subsection (1), an employer contravenes that subsection if the employer fails- (a) to provide or maintain plant and systems of work that are safe and without risks to health; (b) to make arrangements for ensuring safety and absence of risks to health in connection with the use, handling, storage or transport of plant and substances; (c) to provide such information, instruction, training and supervision as may be necessary to ensure the health and safety at work of the employer's employees; (d) as regards any place of work under the employer's control- (i) to maintain it in a condition that is safe and without risks to health; or (ii) to provide or maintain means of access to and egress from it that are safe and without any such risks; (e) to provide or maintain a working environment for the employer's employees that is safe and without risks to health and adequate as regards facilities for their welfare at work; or (f) to take such steps as are necessary to make available in connection with the use of any plant or substance at the place of work adequate information- (i) about the use for which the plant is designed and about any conditions necessary to ensure that, when put to that use, the plant will be safe and without risks to health; or (ii) about any research, or the results of any relevant tests which have been carried out, on or in connection with the substance and about any conditions necessary to ensure that the substance will be safe and without risks to health when properly used. (3) For the purposes of this section, any plant or substance is not to be regarded as properly used by a person where it is used without regard to any relevant information or advice relating to its use which has been made available by the person's employer. (4) If in proceedings against a person for an offence against this section the court is not satisfied that the person contravened this section but is satisfied that the act or omission concerned constituted a contravention of section 16, the court may convict the person of an offence against that section. Maximum penalty: 5,000 penalty units in the case of a corporation or 500 penalty units in any other case. 3 The prosecution arose from injuries sustained by Mr David Raymond Burcher on 26 June 1996 at the defendant's factory premises at Wetherill Park. The defendant carried on a business manufacturing building products and adhesives and employed Mr Burcher as a production supervisor. Mr Burcher had been so employed for the previous five years. 4 On 26 June 1996, Mr Burcher requested that another employee, Mr Kevin Burns, assist him to decant and batch a quantity of neutral filler product which was in one of the defendant's ribbon mixers. This process involved placing drums under two vertical outlet pipes at the bottom of the mixer and opening the valves. A drum was subsequently placed under the valve by a general hand employed by the defendant, Mr Nick Galea, and the valve opened. 5 A problem was encountered during the decanting process because the product emerged only very slowly from the open valves. After consultation with other employees, a decision was made to remove the valve in order to allow the product to run directly from the drain port and to control the flow using the lid of a 20 litre plastic bucket. According to Mr Burcher this procedure had been followed previously when other products had been too thick and refused to flow. However, on this occasion when the valve was removed the product began to gush out. Mr Burcher instructed Mr Burns to get some assistance. Whilst Mr Burcher was attempting to hold the lid in place, the lip of the lid slipped inside the drain port and his right arm entered the mixer coming in contact with the mixing blades. As a result, Mr Burcher's right arm was amputated just below the elbow. 6 Two summonses were initially issued against the defendant alleging offences arising from this incident. The prosecutor and defendant became involved in an exchange of correspondence in which the defendant sought what was described as "further and better particulars". The defendant subsequently filed a notice of motion seeking orders that the prosecutor provide particulars in relation to the summons. In an earlier judgment, the Court determined that the particulars which had been provided by the prosector were appropriate having regard to the charge brought under s15(1) of the Act: see WorkCover Authority of NSW (Inspector Penfold) v Fernz Construction Materials Ltd (1999) 91 IR 119. 7 At the commencement of the hearing, Mr Docking of counsel for the prosecutor indicated that an understanding had been reached with the defendant that a plea of guilty would be entered in relation to one of the summons (Matter No. IRC 3236 of 1998), which alleged a failure to maintain a safe system of work, on the condition that the other summons (Matter No. IRC 3235 of 1998), which alleged a failure to ensure that the plant provided was safe and without risks to health, be discontinued. 8 Mr Docking moved that leave be granted to discontinue the proceedings in Matter No. 3235 if 1998. This submission was supported by Mr Dixon of counsel for the defendant, who also indicated that leave should be granted on the condition that no fresh proceedings be brought in relation to the matter. As a result, I granted leave to discontinue the proceedings in Matter No. 3235 of 1998 in the following terms: In relation to matter 3235 and having regard to the submissions of the parties this morning and previously at the directions hearing of this matter, I order that leave be granted to discontinue the proceedings in matter 3235 of 1998 and the charges therein and in so doing I order that no further or fresh proceedings be brought in relation to that charge. 9 Mr Dixon then formally entered a plea of guilty on behalf of the defendant in relation to Matter No. 3236 of 1998. There was also some discussion between counsel concerning whether the defendant admitted to the further and better particulars which were provided by the prosecution in relation to that charge. After an opportunity was provided for counsel to confer, it was indicated that the defendant pleaded guilty to the charge and admitted only to the particulars contained in the summons in Matter No. 3236 of 1998. The charge contained in that summons alleged that: On 26 June 1996 at factory premises at 67 Elizabeth Street, Wetherill Park, New South Wales, the defendant, being an employer, DID FAIL to ensure the health safety and welfare at work of all its employees and in particular David Raymond Burcher contrary to Section 15(1) of the Occupational Health and Safety Act , 1983, in that it failed to provide and maintain systems of work that were safe and without risks to health. In particular, it failed to provide and maintain a safe system of decanting product from its Ribbon Mixer No.2. 10 The particulars to the charge were stated as follows: a. At all material times the defendant carried on a building products and adhesive manufacturing business at factor[y] premises at 67 Elizabeth Street, Wetherill Park, New South Wales ("the said premises"). b. At all material times the defendant employed David Raymond Burcher as a production supervisor at the said premises. c. On 26 June 1996 Burcher sustained the amputation of his right forearm when it was cut off by mixing blades ("the said blades") of the defendant's Ribbon Mixer No.2 ("the said mixer") while he was decanting product from the said mixer. d. On the said date the defendant: i) failed to provide and maintain systems of work that were safe and without risks to health. ii) failed to provide and maintain a safe system of decanting product from the said mixer. iii) failed to ensure that the said mixer was turned off when its employees were at risk of coming into contact with the said blades. e. As a result of the said failure of the defendant, David Raymond Burcher was placed at risk of injury. 11 A statement of agreed facts was admitted into evidence by consent in the following terms: 1. The Informant is and was at all material times an Inspector duly appointed and empowered by Section 48 of the Occupational Health & Safety Act, 1983, to institute the within proceedings. 2. At all material times FERNZ CONSTRUCTION MATERIALS LIMITED [ACN:000 204 268] ("the defendant") was a company duly incorporated with its registered office at 67 Elizabeth Street, Wetherill Park, in the State of New South Wales ("the said State"). 3. At all material times the defendant carried on a building products and adhesive manufacturing business at factory premises at 67 Elizabeth Street, Wetherill Park, New South Wales ("the said premises"). 4. At all material times the defendant employed David Raymond Burcher as a production supervisor at the said premises. 5. On 26 June 1996 ("the said date") Burcher sustained the amputation of his right forearm when it was cut off by mixing blades ("the said blades") of the defendant's Ribbon Mixer No. 2 ("the said mixer") while he was decanting product from the said mixer. 6. At the time of the accident Burcher was 32 years old and had been employed by the defendant for approximately 5 years. 7. On 26 June 1996 the Informant attended the solvent room at the said premises and observed the said mixer. His observations revealed: a. The said mixer was made of steel, painted green and powered by a multi-horsepower electric motor via enclosed transmission. On the right hand side of the mixer, on a steel plate covering the transmission, the words "Mixer No. 2" were painted on. This mixer was the second one from the western wall, against the northern wall and had a mixing bowl 1.82 metres long by 1.2 metres wide by 1.3 metres high. The base of the mixing bowl was 1.615 metres above the floor. b. Inside the mixing bowl there was a power driven horizontal shaft 110 mm in diameter located 565 mm above the bottom of the mixer bowl. There were 5 double sided arms bolted to this shaft 540 mm in length. There was one arm at each end and the other three equally spaced along the shaft. Welded to these arms were mixing blades 11 mm thick by 700 mm long by 50 mm wide. The end mixer blades were of half length. These arms were also fitted with mixing blades half way along them. c. A pedestrian access platform was located at the front of the mixing bowl adjacent to the front of the bowl. There was a flight of steps adjacent to the mixer leading up to the access platform. d. Located on the left side of the top of the mixer bowl were electrical control buttons consisting of a recessed green start button located above a red mushroom shaped stop button. Alongside this was an on/off isolating switch fitted with a "do not operate tag". Also alongside this was a nitrogen inerting system, now disconnected, which was used when the mixer was used with solvent based products. These switches were located 1.5 metres above the access platform. e. Located at the bottom of the mixer bowl were two vertical outlet pipes 150 mm in diameter fitted with steel flanges 190 mm in diameter by 20 mm thick. One of these outlet pipes was located at the left end of the mixer bowl and was fitted with a ball valve. The other outlet pipe was located at the middle of the bowl and consisted of a vertical pipe and the flange. These outlet pipes were 65 mm long. f. Lying on the floor to the right of the base of the mixer bowl was a DN 50-50 mm steel ball valve fitted with a steel flange that was 190 mm in diameter and 20 mm thick. The said valve had a body 70 mm in diameter and was 180 mm in length. g. The floor of the area immediately under the No. 2 Ribbon Mixer was covered by a grey viscous substance and identified as neutral filler ("the said product"). The said product also covered the ball valve and was coating the flange under the middle outlet pipe. 8. On 28 June 1996 the Informant visited the Solvent Room at the said premises and observed: a. The floor area beneath the said mixer had been cleaned up and most of the said product had been removed. b. The ball valve was still covered with the said product. 9. On 28 June 1996 the Informant again went to the said Solvent Room and observed: a. A flameproof electrical control box which was mounted on one of the vertical supports of the access platform located at the left or western side of the said mixer. The said control box was mounted facing the northern wall and contained two shrouded push buttons. Both these buttons appeared to be black in colour. Above the top button, engraved on the front cover, was the word "start" in letters 3 mm high. Below the bottom button, engraved on the front cover, was the word "stop" in letters 3 mm high. The control box was painted grey in colour and was covered by a mixture of a black substance and a build-up of a product similar to that which had been covering the floor. 10. On the said date: a. Burcher requested Kevin Burns (a process worker employed by the defendant) to decant and batch the said product from the said mixer. b. Nick Galea (a general hand employed by the defendant) placed drums under the two vertical outlet pipes of the said mixer and opened their valves. c. The product came out of the said pipes very slowly. Galea left and went to the powders room. d. According to Galea, at this point he turned the mixer off and left the mixer area. e. Some ten minutes later, as the product was still not coming out properly, Burns requested Galea to assist. At this time, Peter O'Brien (another employee of the defendant) and Burcher also arrived to assist. Galea suggested that the matter be left to the next day and again returned to the powders room. f. Peter O'Brien then left. Kevin Burns and David Burcher decided to remove the ball valve to allow the product to run directly out of a 150 mm drain port and to control the flow of the product with the lid of a 20 litre plastic bucket. g. Burns, with the assistance of Burcher, then obtained tools then used a spanner to remove the bolts from the flange holding the ball valve. h. As they were removing the flange, the product began to gush out. Both Burns and Burcher tried to hold up the said lid but it proved too heavy to hold and the product began to overflow. i. Burns ran outside to activate the alarm. j. As Burcher tried to hold up the lid, the lip of the lid slipped up into the drain port and Burcher's right hand entered the opening and resulted in his hand coming into contact with the said mixing blades. 11. It is alleged that on 26 June 1996 at 67 Elizabeth Street, Wetherill Park, New South Wales, the defendant FERNZ CONSTRUCTION MATERIALS LIMITED [ACN: 000 204 268] breached s15(1) of the Occupational Health and Safety Act 1983 in that it failed to ensure the health, safety and welfare at work of all its employees, and in particular, David Raymond Burcher, in that it: i) failed to provide and maintain systems of work that were safe and without risks to health. ii) failed to provide and maintain a safe system of decanting product from the said mixer. iii) failed to ensure that the said mixer was turned off when its employees were at risk of coming into contact with the said blades. As a result of the said failure of the defendant, David Raymond Burcher was placed at risk of injury. 13. The defendant, FERNZ CONSTRUCTION MATERIALS LIMITED [ACN: 000 204 268 ] has no prior convictions. 12 In addition to the statement of agreed facts, the prosecutor tendered a series of fifteen photographs of the site of the accident taken by Inspector Penfold on 6 June 1996. The prosecutor then sought to tender typed notes taken by Inspector Penfold of an interview conducted with Mr Burcher at Liverpool Hospital on 10 July 1996 and an interview conducted with Mr Burns on 28 June 1996. Mr Dixon objected to the admission of these documents into evidence. He submitted that the evidence was hearsay and prejudicial and should not be admitted unless the deponent of each statement was available for cross-examination so as to enable the statement to be tested and explained. Mr Dixon pointed to s90 and s135 of the Evidence Act 1995 as permitting the exclusion of evidence on the ground that it is prejudicial. 13 Mr Docking submitted that the Court should make a direction pursuant to s4(2)(a) of the Evidence Act that the provisions of that Act apply to these proceedings. He submitted that the Court was required to do so as a result of s4(3) because the evidence of Mr Burcher and Mr Burns involved proof of a fact which is significant in determining the sentence to be imposed in the proceedings. Mr Docking explained that the evidence of Mr Burcher particularly was of direct relevance to the objective seriousness of the offence. The evidence touched upon a number of points of disagreement, including whether the procedure resulting in the accident had been employed previously, whether the employees knew the blades were still moving and the existence of written procedures. Assuming the Evidence Act to apply, Mr Docking submitted that the statements were admissible pursuant to s87 as a representation made by an employee relating to a matter within the scope of the person's employment. 14 Having heard brief submissions, I determined that the statement of Mr Burcher made on 10 July 1996 should be admitted into evidence. The provisions of the Evidence Act apply in proceedings relating to sentencing only if a direction is made by the Court to that effect. I have some reservations as to whether I am required to make such a direction in this case upon an application by the prosecutor. There must be some doubt that the facts alleged to be established by the evidence contained in the statements concern matters which "will be significant in determining a sentence to be imposed" for the purposes of s4(3)(b). In light of the case as a whole, they are of perhaps only marginal significance in the determination of sentence. However, in deference to the way in which the submissions were advanced I made the requisite direction under s4(2) that the provisions of the Evidence Act apply to these proceedings and approached the matter in light of those provisions. 15 Applying the provisions of the Evidence Act, I was satisfied that the statement of Mr Burcher could be admitted as an admission pursuant to s81 and s87. The hearsay rule, which may otherwise prevent the statements being admitting into evidence, does not apply to an admission by a party to proceedings, being a previous representation which is adverse to the party's interest in the proceedings (s81(1)). The court is to admit as an admission a previous representation where the representation was made by a person who was an employee of the party and related to a matter within the scope of the person's employment (s87(1)(b)). In this case, I am satisfied that when Mr Burcher was interviewed by Inspector Penfold he was an employee of the defendant and that his statement related to matters within the scope of his employment. I do not consider that the prejudice to the defendant occasioned by the admission of the statement requires the exercise of my discretion to exclude the evidence under s135 of the Evidence Act. 16 Mr Dixon then accepted that the statement of Mr Burns could be tendered. Mr Docking subsequently tendered typed versions of a number of other statements taken by Inspector Penfold in relation to the accident. Specifically, the prosecutor tendered statements by Mr Nick Galea (a general hand employed by the defendant), Mr James Critchley (a contract electrician who examined the switch box of the Ribbon Mixer), Mr Peter O'Brien (Production Manager at the Wetherill Park site) and Mr William Squires (General Manager of the defendant). 17 Mr Dixon tendered an affidavit sworn on 21 October 1999 by Mr Christopher Hanson, Safety and Environmental Co-ordinator/Maintenance Manager for the defendant. The affidavit contained detailed information concerning the safety policies and practices of the defendant, including information with respect to safety audits, the Occupational Health and Safety Committee, occupational health and safety training and the work permit and "tagging out" systems implemented by the defendant. Mr Hanson gave evidence concerning the procedures relating to the ribbon mixers which were in place at the time of the accident and the steps taken by the defendant to ensure the safety of the ribbon mixers. Mr Hanson also gave evidence concerning steps taken by the defendant following the accident, including assistance provided to Mr Burcher and his family, co-operation provided to the WorkCover Authority and improvements made to safety procedures. Mr Hanson was cross-examined in relation to his evidence. Submissions as to penalty 18 In relation to penalty, Mr Docking for the prosecutor declined to make a submission identifying a specific penalty or range of penalties which should be considered by the Court, but submitted that the case involved a significant matter which called for the imposition of a serious penalty. Mr Docking submitted that the case involved an obvious and serious risk to safety being the risk of employees coming into contact with the blades of the ribbon mixer if the mixer was not turned off prior to any work being conducted on the machine. This risk and its seriousness were known to the defendant and acknowledged in its policies and procedures. Mr Docking contended that this risk was readily foreseeable and was, in fact, foreseen by the defendant. Mr Docking pointed to the fact that the mixer was fitted with power cut-off switches over the top of the mixer to guard against this very risk, but similar devices were not in place at the bottom of the mixer. The foreseeability of a particular risk to safety was said to be a factor relevant to the seriousness of the offence: see Department of Mineral Resources of NSW (Inspector McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27. The seriousness of the consequences of the accident manifest the seriousness of the relevant detriment to safety: see Tyler v Sydney Electricity (1993) 47 IR 1 at 5. 19 Mr Docking submitted that it will be a serious offence where there is an obvious risk or foreseeable risk to safety against which appropriate measures were not taken, even though such measures were available and feasible: see Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 476. In this case, Mr Docking pointed to a number of steps which could have been taken by the defendant which would have prevented the accident. These steps included turning the mixer off before removing the valve, putting mesh over the outlets in the mixer to prevent an employee coming into contact with the mixer's moving parts, the installation of contact and isolation switches on the valve to ensure that power to be mixer would be cut if it is removed and wiring the bolts on the blender to prevent the valve being removed. The defendant's post-injury measures establish that the measures were readily available: see Schultz v Tamworth City Council (1995) 58 IR 221 at 227. 20 Mr Docking conceded that the defendant was entitled to have various subjective circumstances taken into account in mitigation. The defendant was entitled to have consideration given to its plea of guilty, albeit that there has not been an early plea and the defendant has pleaded to the inevitable. It was also conceded that it was proper to take into account the defendant's lack of prior criminal history, its co-operation with the WorkCover Authority, the existence of settled safety procedures and instructions as well as the contrition expressed by the defendant, including the assistance rendered to the injured worker and his family. 21 Mr Dixon for the defendant submitted that in this case the appropriate course was that the Court should discharge the defendant without conviction pursuant to s556A of the Crimes Act 1900. Mr Dixon conceded that the Court was not inclined to apply s556A liberally in case of prosecutions under the Act. However, Mr Dixon contended that if one looks at the defendant's approach to safety generally, its record and all the systems it had in place as well as its preparedness to fix any problem it became aware of, the ordinary principles of sentencing would be satisfied by recording a conviction but without the imposition of a penalty. In particular, it was submitted that there was no call in this case to impose a penalty in consideration of a reformatory or deterrent aspect of the case. 22 Mr Dixon made extensive reference to material contained in and annexed to the affidavit of Mr Hanson which cast light upon the serious approach to safety adopted by the defendant and the nature of the policies and procedures in place to ensure the safety of the defendant's operations. As has been mentioned, these procedures included detailed Occupational Health and Safety policies, regular safety audits and the formation of an Occupational Health and Safety Committee. The defendant conducted a comprehensive induction process for new employees as well as ongoing training for all workers to address issues of safety. Mr Dixon also indicated the Mr Burcher had received extensive training about issues relating to safety in the workplace and had participated in the formulation of many of the defendant's policies as part of the occupational health and safety committee. 23 In relation to the accident, Mr Dixon submitted that the defendant's policy, which was conveyed to employees through the new employee induction process and ongoing training, required that prior to any maintenance work being conducted a work permit be obtained from the supervisor, all equipment be isolated and danger tags put in place. Mr Dixon submitted that there were in place clear training and clear procedures which, if they were followed by Mr Burcher, would have prevented the accident. All employees are trained to isolate any machine before any work is conducted. These were procedures of which Mr Burcher was well aware. He had the power to isolate the mixer before attempting to decant the material from the mixer, but did not do so. Mr Dixon stated that it was almost inconceivable that an experienced and trained supervisor would not have known to ensure that the machine was not operation when working on it. 24 In addition, Mr Dixon indicated that it was accepted that the defendant acted very promptly to remedy any deficiency in its safety procedures and that its willingness to act was indicative of its general attitude to safety. It was submitted that the defendant's conduct and overall attitude to safety are matters which bear critically upon the nature and quality of the offence and the degree of culpability. This employer had demonstrated an attitude and conduct towards safety that was quite out of the ordinary. If the Court did not consider it appropriate to apply s556A, Mr Dixon submitted that the Court should impose a relatively small penalty at the bottom of the scale. 25 There was some discussion during submissions concerning two particular issues. The first issue concerned whether the mixer had been turned off at the stop button prior to Mr Burcher and Mr Burns removing the valve from the outlet of the mixer. The evidence of Mr Burcher was that he believed the mixer had been turned off and was not aware that it was still operating. Mr Burns indicated that Mr Galea had turned the mixer off at the switch, but did not now how it could have been turned on again. In his statement, Mr Galea also stated that he had turned the mixer off when he went to assist Mr Burcher and the other employees with the decanting problem. Mr Docking submitted that, notwithstanding these statements, the evidence did not permit a finding to be made beyond reasonable doubt that the machine had or had not been turned off by the workers. 26 In this regard, there were two possible scenarios. One possibility is that the mixer was operating during the entire decanting process and the workers were mistaken in asserting that it had been turned off. Alternatively, the machine may have been turned off by Mr Galea, but somehow reactivated during the process. I do not think it necessary in this case to make a firm finding in relation to this issue. The workers were all aware that the mixer should have been turned off prior removing the valve. It would seem to me that the issue of whether the mixer was left running as a result of confusion among the workers or reactivated as a result of mechanical failure does not impact significantly on the culpability of the defendant. What is clear is that the mixer was not isolated from its electrical supply. It is only this process which would have ensured that the mixer was not operating and did not present a danger to the employees working on it. 27 The second issue which was raised during submissions related to whether the process of decanting the material from the mixer was a production task or a maintenance task and whether Mr Burcher regarded it as a maintenance or production task. This issue was said to be of some importance as a result of the case advanced on behalf of the defendant. Mr Dixon in effect contended that the defendant had in place policies which required Mr Burcher to isolate the mixer and seek a work permit before commencing any work on the machine. However, as pointed out by Mr Docking, the procedures referred to by Mr Dixon related only to what was described as "maintenance work". For example, the document entitled "System Procedure: Permanent Employee Induction" required that "prior to any maintenance being carried out, a Work Permit must be obtained from the Areas Supervisor, Production Manager or Safety Officer." 28 Mr Dixon directed my attention to certain evidence contained in the affidavit of Mr Hanson. In particular, Mr Hanson stated that the removal of parts of the machine should be undertaken by maintenance personnel after the mixer had been tagged and a work permit issued. If the removal of the flange was necessary to drain the product, Mr Hanson would have supervised the process and ensured that maintenance personnel removed the valve using the work permit and tagging out process. In cross-examination, Mr Hanson agreed with the proposition that decanting product was a production work rather than maintenance work. Mr Docking relied upon that statement. He asserted that what the employees were doing was decanting the product and this did not invoke the procedures prescribed for maintenance work. In re-examination, however, Mr Hanson reasserted that he believed the removal of the flange to be a maintenance task. 29 Again, I do not feel it necessary to come to a firm conclusion as to whether the removal of the valve in order to permit the product to flow out of the mixer involved maintenance work or production work in the language employed in the defendant's procedures. I am satisfied to the requisite standard, however, that there was confusion in the minds of the workers concerning the appropriate procedures to be applied. The actions of the workers in removing the valve without embarking upon the process of obtaining a work permit or notifying a superior indicated that they were of the view that the task did not require that to be done. This conclusion is further confirmed by the statement of Mr Burcher that a similar operation had previously been performed a number of times. Either the workers were under a misapprehension as to the proper procedures (in which case the inappropriate procedure had not been detected or adjusted) or the procedures themselves were unclear. Consideration of penalty 30 I turn now to consider the appropriate penalty to be imposed. The maximum penalty for an offence, in a general way, indicates the seriousness with which Parliament has viewed the offence and represents an appropriate starting point for the assessment of penalty: see Director of Public Prosecutions (Cth) v El Karhani (1990) 21 NSWLR 370 at 380. In this case, the prosecutor submitted that the maximum penalty for the offence is $500,000, a submission which was supported by the defendant. As the defendant has no prior convictions under the Act, s 51A is not brought into play. As a result, I will approach this matter in the manner indicated as one in which the maximum penalty is $500,000. 31 As to the general principles applicable to sentencing I adopt my decision in relation to those principles in Workcover Authority of NSW (Inspector Peter Ankucic) v McDonalds Australia Ltd and Another (unreported, Matter No.'s IRC1104 and 1106 of 1998, 4 February 2000) at 87-98. 32 It is appropriate to commence the determination of penalty by considering the nature and seriousness of the offence. In this regard, I accept the submission advanced by the prosecutor that this is a case in which there was an obvious and serious risk to the safety of the defendant's employees which was left unchecked. The detriment to safety in this case consisted of the risk occasioned by allowing the employees to work in the mixer without ensuring that it was isolated. This detriment is exacerbated by the fact that it was possible to remove the valve at the bottom of the mixer so as to create a direct opening into the mixing chamber. The risk of part of an employee's body entering the chamber of the ribbon mixer and coming into contact with the blades was obvious. That threat, and its seriousness, were expressly acknowledged in the defendant's published process systems. The defendant's procedures acknowledged that the mixing action could cause "very serious injury". It is a threat against which the defendant had attempted to safeguard its employees by the installing proximity switches to the safety grill over the top of the mixing chamber to ensure that power was cut to the machine if the grill was raised. 33 The seriousness of the risk posed by the blades of the mixer is evidenced by the tragic injury sustained by Mr Burcher in this case. Whilst the true nature of a penalty for breach of s15 of the Act lies in the objective seriousness of the offence the occurrence of serious injury manifests the degree of seriousness of the detriment to safety occasioned. Further, the gravity of the potential risk flowing from a breach does constitute a measure of the gravity of the breach itself and a measure of culpability: Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131; Tyler v Sydney Electricity (1993) 47 IR 1 at 5. A case involving the failure of an employer to take appropriate steps to guard against a risk likely to result in serious injury must clearly be assessed on a different level from a failure to guard against a risk unlikely to have such a outcome. In this case, the failure in the defendant's safety system resulted in the amputation of part of Mr Burcher's right arm. Against this kind of threat, the Act requires an employer to take the most stringent of precautions. 34 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 Limited v WorkCover Authority of New South Wales (1998) 80 IR 326 at 342; WorkCover Authority of New South Wales (Insp. Riley) v Broken Hill Proprietary Co Ltd (1998) 83 IR 427 at 429; Department of Mineral Resources (Insp. McKensey) v Kembla Coal at 25. 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 working with the mixers. These measures included the proximity switches attached to the grills at the top of the mixers. Also of significance were the complex system of maintenance procedures evidenced in the documentation annexed to the affidavit of Mr Hanson. Among other things, these procedures were designed to ensure that, before any work was conducted on a machine, the machine was isolated and danger tags placed at appropriate places, the appropriate supervisor was notified and all work was conducted by appropriate personnel. The defendant undoubtedly went to some lengths to explain these procedures to its production employees, including Mr Burcher. 35 However, the occurrence of the accident in this case indicates these 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: see Sydney City Council v Coulson (1987) 21 IR 477 at 480; WorkCover Authority of New South Wales (Inspector Tyler) v Abigroup Contractors Pty Ltd [2000] NSWIRComm 40 at [26]. The Court must have regard not merely to the system as it exists in theory, but as it is implemented in practice. In Inspector Davies v Supercoat Feeds Pty Limited (unreported, CT96/1020, 22 April 1997) at 4, for example, Fisher P said: The relevant system of work, however, is the customary method of carrying out the operation in which the employer is engaged - the system of work is that actually utilised and operated at the place of work. "Paper" systems whose prescriptions are not followed do not represent the actual system of work utilised and are irrelevant. 36 This is not, in my view, a case in which the accident resulted merely from the fact that an employee, or a number of employees, failed to follow a clear and safe procedure established by the employer. It is true that Mr Hanson stated that he would not have embarked upon the course of action adopted by Mr Burcher. He said he would have employed the procedure required for maintenance work which involved isolating the machine, seeking a work permit and notifying a supervisor. The evidence does not support a finding that this was the understanding held by the production workers concerning the necessary procedure to be adopted in the event that a blockage was encountered when draining the mixer. 37 There was at the very least a degree of uncertainty as to whether the employees were required to follow the maintenance procedures in the event that the mixer became blocked during the decanting process. The evidence was that it was not unusual for the mixer to become blocked during decanting and, when necessary, Mr Burcher had successfully removed the valve in order to allow the product to flow out of the mixer. The defendant's procedures did not unambiguously state that a blockage during the decanting process required the adoption of the maintenance procedure. The production workers appeared to regard Mr Burcher's method as an appropriate course of action. Notwithstanding the policies purported to be implemented by the defendant, the system that was, in fact, in place was inherently unsafe. It exposed the employees to the risk of parts of their body entering the open outlet of the mixer without ensuring that the mixer was turned off or isolated. 38 Furthermore, I am satisfied that there were a number of simple and straightforward steps which were available which would have prevented the accident occurring in this case. Following the accident, the defendant wired the bolts on all the ribbon mixers to prevent the flange from being removed, placed mesh over the outlets of the mixers to prevent employee's hands being drawn into the mixer and installed proximity switches on the flange to ensure that if the bolts were removed power to the mixer would be cut. In addition, the defendant conducted an audit of its equipment and upgraded control switches on various pieces of equipment. The defendant is undoubtedly entitled to credit for its swift actions aimed at ensuring that an accident of a similar nature does not occur in the future: see Tyler v Sydney Electricity at 5. However, the actions of a defendant following an accident may, in some situations, be an indication of the measures which should have been taken prior to the accident and that such measures were practicable: see WorkCover Authority of NSW Callaghan v Saunders Constructions Pty Ltd (unreported, Maidment J, CT 93/1062, 26 November 1993) at 7. 39 The nature and gravity of the offence may be evidenced by measures introduced by a defendant to safeguard employees from risks after an accident has occurred: McDonalds Australia at 111; WorkCover Authority of NSW (Inspector Piggott) v Capral (1998) 82 IR 468 at 478; WorkCover Authority of NSW (Inspector Kelsey) v University of Sydney (unreported, Hill J, Matter No. CT1280 of 1995, 2 April 1997) at 20 and 21. 40 The failure of the defendant to take the steps discussed above reveals a failure on the part of the defendant to implement what would have been desirable layers of safety to protect its employees: see WorkCover Authority of New South Wales (Inspector Robins) v Ecolab Pty Ltd (1999) 90 IR 413 at 429. Even if the written policies and procedures of the defendant had been sufficiently clear and comprehensive, a prudent employer in its position would also have implemented secondary measures to ensure that its employees were not exposed to avoidable danger. Where measures exist which would ensure that even employees who do not comply with established work procedures are protected from a known danger or the extent of any danger is minimised, the obligations imposed by the Act make clear that such measures should be adopted. Here, regardless of the policies in place, Mr Burcher would have been in no danger when removing the valve had the mesh or proximity switches been installed in the outlets at the bottom of the mixer. 41 As a result of the considerations noted above, I have formed the view that the offence is a sufficiently serious one to bring it above the lower end 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, nor were they sufficiently maintained in practice. The procedures which were in place were also not supported by secondary layers of safety which would have protected the employees whether or not they had adhered to the defendant's view of the written procedures. These failings exposed the defendant's employees to risk of serious injury. 42 It is, however, appropriate to consider various subjective factors which may properly lead to a reduction in the penalty which may otherwise have been imposed. The defendant is entitled to have its plea of guilty considered in the determination of penalty: see Alcatel Australia Limited v WorkCover Authority of New South Wales (Inspector Clyant) (1996) 70 IR 99 at 106-107; and Nesmat Pty Limited v WorkCover Authority of New South Wales (1998) 87 IR 312 at 322. The defendant did not formally enter a plea until the commencement of the hearing. However, the proceedings were subject to a dispute concerning the adequacy of the particulars provided by the prosecutor and an arrangement was negotiated for the defendant to plead guilty to one of the two summonses originally issued. In these circumstances, I do not regard the plea to have been entered at an unduly late stage. I also do not believe that this is a case in which the plea of guilty was merely a recognition of the inevitable: cf. R v Winchester (1992) 58 A Crim R 345 at 350. 43 A major consideration raised by the defendant concerned its lack of prior convictions and conscientious approach to health and safety issues in the workplace. The prosecutor conceded that the defendant had no prior convictions and was entitled to have its record considered. However, the prosector stated that the offence was not an uncharacteristic aberration, but rather the result of a defective work system being in place for some time. Whilst Mr Burcher may have performed the operation which resulted in the accident on prior occasions, I do not believe this reduces to any significant extent the credibility of the defendant's record. In some cases, a defendant should properly be given little credit for a good record where they have allowed a patently unsafe practice to remain in place for many years, notwithstanding the fact that fortuitously no accident had occurred. This is not the case in the present matter. While an unsafe practice did develop in its operations, it was not demonstrated that the practice was in place for an extended period or that the management were aware of its existence. The defendant has exhibited a responsible attitude to issues of safety and has taken significant steps to implement occupational health and safety procedures. This approach is reflected in the defendant's record. The previous good industrial citizenship of the defendant will be taken into account in mitigation: McDonald's Australia at 144 44 The defendant co-operated with the WorkCover Authority in the investigation following the accident. This is another factor which should be taken into account in assessing the subjective features of the offence (even in the case of corporations): Alcatel at 107 (also see Huang (1994) 78 A Crim R 111 at 114). 45 I also accept that the defendant is contrite. Contrition, repentance and remorse after the offence are mitigating factors which may lead to a reduction in the sentence otherwise to be imposed: Department of Mineral Resources of NSW v A M Hoipo & Sons Pty Ltd [2000] NSWIRComm 16 (at para 64). Moreover, the defendants contrition was demonstrated by its actions, including the assistance provided to Mr Burcher and his family following the accident. Among other things, the defendant provided counselling for Mr Burcher and other employees involved in the accident. Representatives of the defendant visited Mr Burcher in hospital and the defendant offered to cover costs incurred by Mr Burcher and his family. The defendant also took steps to assist in Mr Burcher's rehabilitation and return to work. The defendant provided for Mr Burcher to return to the site as part of a desensitising process, created a special position for Mr Burcher and allowed him to return to work gradually. These actions are commendable and, in my view, should be reflected in the penalty to be imposed. I apply in this respect the judgment of the Full Bench in Corinthinian Industries (Sydney) Pty Ltd v WorkCover Authority of New South Wales (Inspector Wilson) [2000] NSWIRComm 46 where it is stated (at para17): 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. We have accordingly reached the conclusion that in all the circumstances of this case the penalty was inappropriate and excessive. Conviction and penalty 46 Having regard to the summons in Matter No. 3236 of 1998, the particulars of that offence, the statement of agreed facts and the evidence tendered in these proceedings, I am satisfied that the offence has been proved and that the plea of guilty has been properly made by the defendant. A verdict to that effect is entered against the defendant. 47 I do not accept that this is a case in which s556A of the Crimes Act should be applied in favour of the defendant. Although the defendant demonstrated a good safety record and a conscientious approach to the safety in the workplace, the application of s556A will, in my view, rarely be appropriate in a case where an obvious risk to safety which is likely to cause, and did in fact cause, serious injury has been permitted to endure in the defendant's operations: see WorkCover Authority of New South Wales v Waugh (1995) 59 IR 89 at 100. 48 For the reasons given above, I consider an appropriate penalty with regard to the offence under s15 of the Act to be a fine of $50,000.00. 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 and good record and its co-operation with the WorkCover Authority. The prosecutor should have a moiety of the fine. Orders 49 I make the following orders: 1. The defendant is convicted in relation to the offence charged in the summons in matter no. 3236 of 1998. 2. The defendant is fined the sum of $50,000.00 with a moiety to the prosecutor. 3. The defendant is to pay the prosecutor's costs, as agreed or 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.