Industrial Relations Commission of New South Wales in Court Session CITATION : WorkCover Authority of NSW (Insp Howard) v General Beton Co Pty Ltd [2001] NSWIRComm 80 Prosecution: PARTIES : WorkCover Authority of NSW (Insp Howard) Defendant: General Beton Co Pty Ltd FILE NUMBER: IRC5978 of 1999 CORAM: Kavanagh J CATCHWORDS : s 15(1) prosecution at building site - no lights - no scaffold - no railing - wet conditions - employee works in dark - guilty plea - subjective element of offence including corporate reputation to include corporate character as well as industrial record of company - utilitarian value of plea - penalty LEGISLATION CITED : Occupational Health and Safety Act 1983 Lawrence Diecasting Ltd v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 Haynes v James Glass & Aluminium Pty Ltd (unreported, Fisher C J, CT91/772-775, 20 May 1994) Tyler v Sydney Electricity (1993) 47 IR 1 CASES CITED : Department of Mineral Resources of New South Wales (Chief Insp B R McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 R v Thompson, R v Houlton (1999-2000) 49 NSWLR 383 WorkCover Authority of New South Wales (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80 SRA v WorkCover Authority of New South Wales (Inspector Dubois) [2000] NSWIR Comm261 Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 99 IR 29 HEARING DATES: 02/16/2001 DATE OF JUDGMENT: 04/27/2001 PROSECUTOR: P.M. Skinner of counsel SOLICITORS: Moray & Agnew LEGAL REPRESENTATIVES: DEFENDANT: B.D. Hodgkinson of counsel SOLICITORS: Corrs Chambers Westgarth JUDGMENT: - 12 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: KAVANAGH J Date: Fri 27 April 2001 IRC5978 of 1999 WORKCOVER AUTHORITY OF NSW (INSP HOWARD) v GENERAL BETON CO PTY LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983 JUDGMENT (As to penalty) 1 This is a prosecution under s15(1) of the Occupational Health and Safety Act 1983. The summons pleads that the defendant company, General Beton Co Pty Limited: On 10 November 1997 at a residential home unit construction site situated at 19-23 Marlo Road, Cronulla, in the State of New South Wales, . . . being an employer, did fail to ensure the health, safety and welfare at work of all its employees and, in particular, Pietro Scalise, contrary to s 15(1) of the Occupational Health and Safety Act 1983 in that it failed to provide and maintain a system of work for the laying and finishing of concrete that was safe and without risks to health. 2 The following particulars of the breach were pleaded and agreed to: 17. At the time the worker fell from the building there was no railing in place around the perimeter of the third floor level of the building in the vicinity of where he had been working. 18. At the time the worker fell from the building there was no scaffolding erected to enable him to safely carry out his work at the edge of the building. 19. At the time the worker fell from the building there was no artificial lighting in place to illuminate the area where he was working. 3 There was an Agreed Statement of Facts which relevantly reads as follows: 3. At all material times the defendant was an employer, and conducted the business undertaking of the pouring and finishing of concrete slabs in the course of building construction. 4. At all material times and in particular on 10 November 1997 the defendant was conducting its said undertaking at a home unit construction site situated at 19-23 Marlo Road, Cronulla in the state of New South Wales. 5. The defendant at all material times employed Pietro Scalise ("the worker"). He had been so employed as a concreter/finisher for approximately 11 years. 6. At all material times the worker was engaged as a concreter/finisher at a construction site at 23 Marlo Road, Cronulla ("the site"). 7. The defendant was engaged by Ronald Bezzina and Peter Butterfield trading as Bezzina Butterfield Builders ("the builder") to place the steel and place and finish the concrete at the site. The defendant subcontracted the task of placing the steel. 8 . At all material times the builder was constructing a twenty-one residential home unit complex of a walk-up type ("the building") at the site. 9. On 10 November 1997 the defendant undertook the pouring and finishing of the floor slab of the second storey of the building. Despite the worker and his fellow employees of the defendant having arrived at the site to commence work at approximately 7.30am there were delays in the arrival of the concrete required to be poured to form the said floor slab of the building. 10. Because of the delays in starting, the job was unable to be finished without the worker and two of his fellow employees having to continue working into the evening. 11. At approximately 6.30pm a summer storm swept over the site and the worker and his two fellow employees took shelter in the site shed at ground level for an hour or so. Upon telephoning one of the directors of the defendant, the three men were directed to see if the rain would cease. 12. The rain persisted and got heavier. Upon a second telephone call to one of the directors of the defendant the men were directed to pack up and leave the job. A heavy 'Helicopter' finishing machine had been left on the freshly poured slab and when the men went back up to the second storey level of the building to finalise the job for that day, the slab was wet and night had completely fallen. 13. Immediately prior to 7.45pm on 10 November 1997 the worker was using a hand trowel to close up the last footprints which were made in the freshly laid concrete for the said floor slab by his two fellow workers when they were removing the Helicopter machine. 14. . . . . 15. At approximately 7.45pm on 10 November 1997 the worker slipped and as a consequence fell from the edge of the second storey of the building a distance of approximately 5.9 metres and landed on the concrete slab at ground level. 16. The worker suffered serious injuries as a result of the fall. . . . 4 Mr P.M. Skinner of counsel represented the prosecutor and Mr B.D. Hodgkinson of counsel, represented the defendant. The defendant entered a plea of guilty to the charge. 5 Essentially the particulars to the charge reveal the defendant required employees to work as concreters at night, in the dark, it being approximately 7.45pm, on the second floor of an apartment building site in wet and rainy conditions without lights. There were no scaffolding or railings around the second storey. While performing his duties, one employee slipped and fell 5.9 metres from the second level. 6 This court must assess the objective seriousness of this offence. A Full Bench of this Commission in Lawrence Diecasting Ltd v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 (at 474) commented: . . ., in our view, it is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence". and the Full Bench said (at 474): It has been observed on a number of occasions that subjective factors which mitigate the seriousness of the offence or exculpate the accused must be secondary to consideration of the nature and quality of the offence. The Full Bench cited with approval the passage from the judgment of Fisher CJ in Haynes v James Glass & Aluminium Pty Ltd (unreported, CT91/772-775, 20 May 1994) where his Honour said (at 474): . . . While previous good industrial citizenship and the absence of prior convictions are proper considerations, their importance lies well behind the two primary aspects of the matter, namely the nature and quality of the offence and the clear policy of the Act in relation to the establishment of safe standards and the protection of the workforce. The Full Bench noted (at 476): . . . the proper approach is to first consider the gravity of the offence viewed objectively. 7 This incident occurred in an industry which has been endeavouring to ensure basic work-site safety standards are complied with. The facts reveal the defendant's company had been working at the laying of concrete on this building site for three days. The site was a construction site erecting 21 residential home units of the three storey walk-up type. In addition there was a basement level car park at the site. Mr Scalise suffered serious injuries in the 5.9 metre fall requiring him to re-educate himself and leave an industry which requires physical stamina to perform bending, lifting and carrying duties. He is now employed in a more esoteric field. The defendant company acknowledges the absolute obligation it bears as an employer not to expose its workers to any risk to their safety. There were many risks to the safety of workers on this building site. The employer sent its employees out to work without reviewing the state of the worksite. 8 As was said in Tyler v Sydney Electricity (1993) 47 IR 1 (at 5): The gravity of the damage or injury actually resulting from breach does not, of itself, dictate the amount of penalty. However, the gravity or otherwise of the potential risk flowing from breach and its foreseeability are clearly relevant as are the measure of gravity of the breach itself and the measure of culpability. 9 The work of concrete placement is performed on building sites and involves the pouring of concrete slabs for domestic houses, slabs in multi-storey apartment buildings, slabs for medium density housing and shopping centre complexes. As well it provides concrete columns for commercial high rise buildings. 10 The circumstances reveal the risk to safety was great. The combined circumstances of height, no scaffolding, no lights and the wet conditions combined to give an element of foreseeability to this accident. The employers had urged the employees to stay on the site knowing it had been raining and it was getting dark. As was said by Walton J, Vice President in Department of Mineral Resources of New South Wales (Chief Inspector B R McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 (at 27): Whilst the reasonable forseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng ), the degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence: see Camilleri's Stock Feeds (at 700); James Moore v Vibro-Pile (Aust) Pty Ltd (unreported, Hungerford J, CT96/1163, 28 May 1997, at p17) and WorkCover (NSW) (Insp Kelsey) v University of Sydney (unreported, Hill J, CT95/1280, 2 April 1997, at 16). 11 An assessment of the gravity of this offence requires the court in its consideration to acknowledge there were no safety measures to protect these workers performing duties at a considerable height above the ground. The photographs tendered in evidence reveal much building and construction equipment was lying dangerously around the site. The workers were required to complete a task without lights, in the dark, in the wet, on a freshly laid concrete floor above ground level. I find this a serious offence. 12 However, the court may take into account the subjective elements related to the breach. 13 The maximum penalty at the time of the offence under s15(1) was $550,000. Evidence revealed this company had no prior convictions. Other issues related to the operation of this company have been tabled before the court. The company's particular circumstances become relevant. The company has two directors, both brothers, with the surname Pizzinato. One of the brothers, Albert Luigi Pizzinato gave a signed statement to the Court and was available for cross examination but not required. He is a 34 year old man with a Bachelor of Engineering (Civ) who has worked full time with the defendant except for a period of three months when he worked with the company's predecessor owned by his father, a company known as Pedy Concrete Co Pty Limited (Pedy Concrete). 14 The corporation was established in February 1994. It was established following Pedy Concrete entering into liquidation in 1993. Pedy Concrete was a concrete placement company established in 1959 by the father of the Pizzinato brothers. As a company, Pedy Concrete traded successfully for 35 years in the building industry working in the placement of concrete. 15 During the 1980s Pedy Concrete, the former company, employed up to 55 persons in addition to subcontractors. Pedy Concrete in its 35 year history had no convictions from the WorkCover Authority. In the early 1990s during a nation-wide recession which led to a downturn in the building industry, Pedy Concrete suffered financial loss. When the company was put into receivership an arrangement was entered into with its creditors that General Beton, this defendant company, would repay Pedy Concrete's outstanding debts. Those debts were in the order of $3,000,000 to major creditors, including Pioneer Concrete, Boral, CSR, Concrite and Westpac. The receiver was able to obtain $750,000 from debtors. 16 The purpose of the brothers forming the defendant company was to enter into an arrangement with creditors so as to avoid the bankruptcy of their mother and father who were the directors of Pedy Concrete. Much of the debt has now been repaid from the earnings of General Beton although there is still an acknowledged debt of approximately $600,000. 17 Placed before the court were the operating accounts for the financial years 1999 and 2000 respectively. An examination of those financial documents revealed the company has a turnover of approximately $1,000,000 per year. The accounts reveal the payment to various creditors as well as payments to the family for management fees. The payment in the profit and loss statement for 1999 and 2000 in the sum of $270,000 (approximately) was distributed amongst five family members. Other payments met expenses, debt and overheads. The company in the financial year ending 30 June 2000 had an operating loss of approximately $94,000. 18 These facts allow the court to conclude the defendant corporation is of a fine corporate character. It has no prior convictions and in the two corporate names which have been placed before the court for consideration, has traded over 40 years in the building industry. Further, the fact it has assumed the responsibilities and debts of a prior corporate identity is to its credit as is the sentiment expressed by the brothers that they did not wish to have the founding father and their mother placed into the indignity of bankruptcy. On all these facts I accept this corporation presents before the court as a fine corporate citizen. In this modern world of corporate governance such responsible personal behaviour of directors and responsible corporate behaviour is to be acclaimed: (see Evidence Act, 1995; WorkCover Authority of NSW (Insp Ankucic) v McDonalds Australia Ltd & Anor (1999) 95 IR 383 (at 454); WorkCover Authority of NSW (Insp Ankucic) v Capral Aluminium Ltd [2001] NSWIRCom10 [at 19]). 19 The corporation could not be called a lucrative corporation. It is a business with a yearly turnover of nearly $1,000,000. It employs contractors, pays back debt and is supporting five family members. It runs at a loss. 20 I accept further that there is a utilitarian value to this plea. Recently the New South Wales Court of Criminal Appeal published a guideline judgment in R v Thompson; R v Houlton (1999-2000) 49 NSWLR 383 in relation to the consideration a court should give to pleas of guilty entered by a defendant. The judgment calls for a discount in consideration of the utilitarian value of a plea of guilty. The defendant makes application for consideration as to a discount for the utilitarian value of its plea in accordance with the reasoning as enunciated by Spigelman CJ [at 153-155]: 153 The determination of where, within such a range, the discount should fall in a particular case is a matter for the discretion of the sentencing judge. 154 There are however two circumstances which will generally affect the appropriate level of discount in a particular case: (i) The time at which a plea is entered. A plea entered at committal has a more significant utilitarian benefit than a plea entered at first listing, which in turn has the greater benefit than a plea entered at the beginning of trial. (ii) The complexity of the issues about which evidence will have to be gathered and adduced affects the value of the plea. The greater the difficulty of assembling the relevant evidence and the greater the length and complexity of the trial, the greater the utilitarian value of a plea. 155 The top of the range would be expected to be restricted to pleas at the earliest possible opportunity and should not be given, save in an exceptional case, after a matter has been set down for trial. A discount towards the bottom of the range is appropriate for late pleas, for example, on the date fixed for trial, unless there are particular benefits arising from the prospective length and complexity of the trial. 21 The guideline adopted by the Court of Criminal Appeal was as follows [at 160]: (i) A sentencing judge should explicitly state that a plea of guilty has been taken into account. Failure to do so will generally be taken to indicate that the plea was not given weight. (ii) Sentencing judges are encouraged to quantify the effect of the plea on the sentence insofar as they believe it appropriate to do so. This effect can encompass any or all of the matters to which the plea may be relevant - contrition, witness vulnerability and utilitarian value - but particular encouragement is given to the quantification of the last-mentioned matter. Where other matters are regarded as appropriate to be quantified in a particular case, for example, assistance to authorities, a single combined quantification will often be appropriate. (iii) The utilitarian value of a plea to the criminal justice system should generally be assessed in the range of 10-25 per cent discount on sentence. The primary consideration determining where in the range a particular case should fall, is the timing of the plea. What is to be regarded as an early plea will vary according to the circumstances of the case and is a matter for determination by the sentencing judge. (iv) In some cases the plea, in combination with other relevant factors, will change the nature of the sentence imposed. In some cases a plea will not lead to any discount. 22 I find there should be some consideration as to the utilitarian value of the plea entered. The prosecution in this matter was filed on 29 October 1999. The matter came on for mention on 14 February 2000 and was mentioned on three other occasions. On 15 May 2000, after appropriate legal advice, a plea of guilty was entered. 23 Evidence revealed the brothers co-operated with the WorkCover Authority in its investigation and, after entering the plea, assisted in the preparation of the Agreed Statement of Facts. There is some evidence another related matter was litigated, which litigation took up five days of the court's time. The brothers assisted the WorkCover Authority in that litigation which was a prosecution against the building company. In the assembling of relevant evidence and ensuring no lengthy and complex second trial there was a considerable further utilitarian value to the plea entered. I allow a 20% discount on penalty. 24 In consideration of the subjective elements of this offence I take into account the reputation of the company. I have found the company to be a good corporate citizen. I acknowledge the expressed contrition of Mr Pizzinato on behalf of the company. He has acknowledged the gravity of the offence both in the plea of guilty and personally. 25 After this tragic event the company has now a comprehensive safety policy that ensures no employee goes onto a building site without an on-site check that appropriate hand rails and safety scaffolding are in place. This employer acknowledges, in accordance with its absolute obligations, it must provide such safety features if it sends workers onto a building site and they are not in place. Its obligation is to its workers. The moment it sends its workers onto a site it is responsible for any risk to their safety. 26 Before the court was a document demonstrating the safety procedures now adopted by the company. They have been drawn up under the guidance of the WorkCover Authority. While tendered in evidence was a general handbook, the court understands it is supported at various sites by further documentation directed to site-specific safety procedures. 27 However, it is also noted and acknowledged that prior to this accident there was little endeavour from this employer in the way of training its workers as to awareness of site-safety. Only a general manual was available. As was said by Hill J in WorkCover Authority of New South Wales (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80 (at 85): This case is yet another illustration of the need for employers to exercise abundant caution, maintain constant vigilance and take all practical precautions to ensure safety in the workplace. It is essential that the approach should be a pro-active and not a re-active one; employers should be on the offensive to search for, detect and eliminate, so far as is reasonably practicable, any possible areas of risk to safety, health and welfare which may exist or occur from time to time . . . This view has recently been supported by the Full Bench in SRA v WorkCover Authority of New South Wales (Inspector Dubois ) [2000] NSWIR Comm261. 28 Any consideration of this court as to penalty, the defendant submitted, should take into account the principle of consistency (see Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 99 IR 29 [at 62-63]). At the time of this submission, a judgment of the court considering similar facts in the prosecution against the builder was reserved. That judgment has now been published but only addresses the issue of liability. The issue as to penalty is still to be litigated. I intend to give judgment in this matter and do not apply to my consideration to the principles of consistency as to penalty because the penalty imposed on the builder has not been determined. 29 I take into account the gravity of this offence as well as the subjective features of the breach put before the court and referred to in this judgment. The court takes into account the utilitarian value of the plea. I find the defendant guilty. I fine the defendant in the sum of $70,000 with a moiety to the WorkCover Authority. I award costs to the WorkCover Authority. 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.