Industrial Relations Commission of New South Wales in Court Session CITATION : Inspector Wilkie v Greater Lithgow Skills Training Incorporated t/as Greater Lithgow Employment Agency [2004] NSWIRComm 166 PROSECUTOR Inspector Robert Wilkie PARTIES : RESPONDENT Greater Lithgow Skills Training Incorporated t/as Greater Lithgow Employment Agency FILE NUMBER: 2599 of 2003 and 2600 of 2003 CORAM: Staff J CATCHWORDS : Occupational Health and Safety - Two charges under s 15(1) of the Occupational Health & Safety Act - Plea of guilty - Employee using a woodchipping machine - Risk to health and safety - Foreseeability - Early plea of guilty - Contrition - No prior conviction - Defendant withdrawn from providing labour - Employer limited means - Section 51A - Principle of totality - Offence proven - Penalty imposed - Defendant to pay the prosecutor's costs of proceedings as agreed LEGISLATION CITED : Occupational Health & Safety Act 1983 Fines Act 1996 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610, (2000) 99 IR 29 Crown in Right of the State of New South Wales (Department of Education and Training) v Keenan (2001) 105 IR 181 Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'Ng) (1999) 90 IR 432 Fletcher Construction Australia Ltd v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66 Inspector Jones v Supercut Concrete Service Pty Ltd [2004] NSWIRComm 83 Inspector Lyons v Active Tree Services Contracting Pty Ltd [2002] NSWIRComm 311 Inspector Wilkie v Batequip Pty Limited (formerly Bateman Equipment Pty Limited) T/as Ditch Witch Australia [2003] NSWIRComm 111 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Manpac Industries Pty Ltd v WorkCover Authority of New South Wales (Inspector Glass) (2001) 106 IR 435 Pearce v The Queen (1998) 194 CLR 610 CASES CITED : R v Thomson, R v Houlton (2000) 49 NSWLR 383 R v Sharma (2002) 54 NSWLR 300 State Rail Authority of New South Wales v WorkCover Authority of New South Wales (Inspector Dubois) (2000) 102 IR 218 Swift Placements Pty Ltd v WorkCover Authority of New South Wales (2000) 96 IR 69 WorkCover Authority of New South Wales v Yass Shire Council (2000) 99 IR 284 WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd (2001) 105 IR 81 WorkCover Authority of New South Wales (Inspector Barbosa) v Newstart 150 Pty Ltd (2002) 113 IR 78 WorkCover Authority of NSW (Inspector Buggy) v Weathertex Pty Ltd (2003) 127 IR 60 WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 WorkCover Authority of New South Wales (Inspector Moore) v Blacktown City Council (2003) 124 IR 59 WorkCover Authority of New South Wales v Waugh (1995) 59 IR 89 WorkCover Authority of New South Wales v Yass Shire Council (2000) 99 IR 284 HEARING DATES: 05/05/2004 DATE OF JUDGMENT: 06/10/2004 PROSECUTOR Mr P Skinner of counsel Solicitor: Mr G Phillips Carroll & O'Dea LEGAL REPRESENTATIVES: DEFENDANT Mr R Reitano of counsel Solicitor: Mr D Browne BrowneLinkenbagh JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION Coram: Staff J 10 June 2004 Matter Nos IRC 2599 of 2003 and 2600 of 2003 INSPECTOR ROBERT WILKIE v GREATER LITHGOW SKILLS TRAINING INCORPORATED T/AS GREATER LITHGOW EMPLOYMENT AGENCY Prosecution under s 15(1) of the Occupational Health and Safety Act 1983 JUDGMENT [2004] NSWIRComm 166 1 Greater Lithgow Skills Training Incorporated which trades as Greater Lithgow Employment Agency ("the Defendant") is a non profit community organisation comprised of five board members who are all volunteers. 2 The defendant provides temporary labour hire to businesses generally located in the Greater Lithgow and Upper Blue Mountains area. It's aim is to place an unemployed person in employment through labour hire by allowing the person to gain skills and experience with a business. The defendant does not charge a business any fees if the business employs one of it's employees. The defendant sub-contracted an employee, Mr Morgan, to Integral Energy Australia ("Integral Energy"). 3 On 17 May 2001, Mr Morgan was operating a Model 10 Morbark Woodchipper ("the Morbark Woodchipper") Serial Number 4S8SZ131ZFW021391 at Yarran Road, Bargo. On that day an employee of Integral Energy, Mr Barry Butterfield was working with Mr Morgan, picking up and chipping branches previously cut from the vicinity of overhead power lines. Whilst Mr Butterfield was operating the machine, the glove on his right hand became caught on a branch that was being fed into the machine, dragging Mr Butterfield's right hand, arm and body onto the rotating feed rollers of the machine. Mr Butterfield suffered significant cuts to his arm and head. He required 80 stitches in his arm and 38 stitches in his head as a result of the injuries he received. The suppliers of the Morbark Woodchipper were prosecuted under s 18(1) of the Occupational Health & Safety Act 1983 and convicted: see Inspector Wilkie v Batequip Pty Limited (formerly Bateman Equipment Pty Limited) T/as Ditch Witch Australia [2003] NSWIRComm 111. 4 Arising out of what occurred on 17 May 2001, the defendant was prosecuted by Inspector Wilkie of the WorkCover Authority of New South Wales under s 15(1) of the Occupational Health and Safety Act 1983. Section 15 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. 5 It was relevantly alleged in the application for order that: The defendant … being an employer on 17 May 2001 at Yarran Road, Bargo ("the site") in the State of New South Wales, DID FAIL , contrary to Section 15(1) of the Occupational Health & Safety Act 1983 (NSW) to ensure the health, safety and welfare at work of all of the Defendant's employees, and in particular Mr Alan Morgan ("Mr Morgan"), in that the Defendant failed to: (i) provide or maintain plant, to wit a Model 10 Morbark Woodchipper; Serial Number 4S8SZ131ZVW021391 ("the machine) which was operated by Mr Morgan, that was safe and without risk to health; 6 On 25 May 2001, David Holland, an employee of Integral Energy, together with Alan Morgan were operating a woodchipping machine known as a Model 65 Brush Bandit Woodchipper ("the Brush Bandit Woodchipper") at Oxford Road, Ingleburn in New South Wales. Both men were feeding branches and leaves into the machine. No incident occurred in respect of the machine on this day. 7 Arising out of the use of the Brush Bandit Woodchipper on 25 May 2001, the defendant was prosecuted by Inspector Wilkie of the WorkCover Authority of New South Wales under s 15(1) of the Occupational Health & Safety Act 1983. 8 It was relevantly alleged in the application for order that: The defendant … being an employer on 25 May 2001 at Oxford Road, Ingleburn ("the site") in the State of New South Wales, DID FAIL, contrary to Section 15(1) of the Occupational Health & Safety Act 1983 (NSW) to ensure the health, safety and welfare at work of all of the Defendant's employees, and in particular Mr Alan Morgan ("Mr Morgan"), in that the Defendant failed to: (i) provide or maintain plant, to wit a Model 65 Brush Bandit Woodchipper Serial Number 003648, Unit No. 32477 ("the machine") which was operated by Mr Morgan, that was safe and without risk to health; 9 The defendant pleaded guilty to each of the charges laid against it. 10 The application for order in respect of the incident on 25 May 2001 regarding the Brush Bandit Woodchipper Serial Number 003648 being unsafe and a risk to health were particularised in similar terms to those set out above. The particulars therefore of the charges relating to 25 May 2001 were essentially the same in relevant respects as those relating to the incident on 17 May 2001. 11 The Prosecutor tendered an agreed statement of facts in respect of the incident on 17 May 2001 which contained the following facts (formal parts omitted): 4. At all material times, the Defendant was an employer, and employed Mr Morgan. 5. At all material times, the Defendant subcontracted its employees, including Mr Morgan, to Integral Energy Australia ("Integral Energy") to undertake tasks, including the task of picking up and chipping branches. 6. At all material times, Integral Energy was in the business of an energy distributor with its principal function being to establish, maintain and operate facilities for the distribution of electricity and/or other forms of energy and to supply such electricity or other forms of energy and services relating to the use and conservation of electricity to other persons and bodies. Consistent with this purpose, Integral Energy at all material times carried out the clearing and chipping of vegetation at various sites, including the site at Yarran Road, Bargo in the State of New South Wales ("the site"). 7. At all material times Mr Morgan was at work. 8. On 17 May 2001 ("the accident date") Mr Morgan was operating a Model 10 Morbark Woodchipper ("the machine") serial number 4S8SZ131ZFW021391 at the site and was feeding vegetation into the machine. 9. On the accident date, an employee of Integral Energy, namely Mr Barry Butterfield ("Mr Butterfield") was working with Mr Morgan at the site in picking up and chipping branches previously cut from the vicinity of overhead powerlines at the site. 10. On the accident date, whilst Mr Butterfield was operating the machine, the glove on his hand became caught on a branch that was being fed into the machine, dragging Butterfield's right hand, arm and body onto the rotating feed rollers of the machine. 11. Just prior to the accident, Mr Morgan had fed branches into the in-feed of the machine and had turned and walked approximately three (3) metres to a pile of branches. Upon picking up a handful of branches and turning towards the machine, Mr Morgan noticed Mr Butterfield's two legs waving from inside the in-feed of the machine. 12. Mr Morgan was able to assist Mr Butterfield by pulling him out of the machine. 13. In the subject accident, Butterfield suffered significant cuts to his arm and to his head. Eighty (80) stitches were placed in butterfield's (sic) arm and thirty eight (38) stitches were placed in his head as a result of the injuries he received. 14. On the accident date, the in-feed chute of the machine was insufficiently long to guard against the rapid intake of an operator who had become entangled in material being fed into the machine. 15. The machine lacked an easily accessible safety mechanism within the feed chute which would allow an operator who had become entangled in material being fed into the machine quickly to reverse or stop the operation of the in-feed roller. 16. The machine lacked an easily accessible safety mechanism accessible from within the feed chute which would allow an operator who had become entangled in material being fed into the machine quickly to reverse or stop the operation of the in-feed roller. 17. The side guards of the in-feed chute were insufficient to protect against the rapid intake of an operator who had become entangled in material being fed into the machine. 18. The side guards of the fold down tray were insufficient to protect against the rapid intake of an operator who had become entangled in material being fed into the machine. 19. In or around September 1998 when Integral Energy had been supplied with the machine, it had also been supplied with a user manual for the machine. The user manual provided, inter alia, the following information for operators:- "Before anyone starts up a brush chipper they should know this:- ANY MACHINE THAT CAN PULL IN A WHOLE TREE AND CHIP IT IN LESS THAN A MINUTE IS DANGEROUS IF THE OPERATOR DOES NOT FOLLOW PROPER SAFETY PROCEDURES". We have done all we can do to manufacture the safest chipper possible that will do the job it is intended for. But no matter how we build it, IT CAN BE DANGEROUS IF IT IS NOT USED PROPERY (sic). It is the responsibility of the owner to ensure that the operators are properly trained and that they practice safe chip operating procedures on the job practices." 20. The use of the machine in accordance with the operating manual was inadequate to protect the user of the machine without the machine being unsafe and a risk to health. 21. As at the accident date, the Defendant had not developed any adequate formal safety operating procedures relating to the use of the machine, in addition to the user manual. As at the accident date, Mr Morgan had not seen the user manual, and had not viewed the safety video referred to in the user manual. 22. On 17 May 2001, the Defendant, being an employer at the said site, contrary to Section 15(1) of the Occupational Health & Safety Act, 1983 (NSW), failed to ensure the health, safety and welfare at work of all its employees, and in particular, Mr Alan Morgan, in that it failed to:- a) provide or maintain plant, to wit a Model 10 Morbark Woodchipper; Serial Number 4S8SZ131ZVW021391 ("the machine") which was operated by Mr Morgan, that was safe and without risk to health; 12 The Prosecutor tendered an agreed statement of facts in respect of the charge relating to 25 May 2001. The agreed statement of facts contained similar facts to those relating to the incident on 17 May 2001 together with the following additional facts: 8. At all material times, Kennards Hire Pty Limited supplied plant for use by persons, to wit a Model 65 Brush Bandit Woochipper Unit No. 32477 (registration number K41353) ("the machine") to Integral Energy for use by employees and/or subcontractors of Integral Energy at work. 9. On 25 May 2001 Mr Morgan was operating the machine at the site and was feeding vegetation into the machine. 10. On 25 May 2001, an employee of Integral Energy, namely David Holland ("Mr Holland") was working with Mr Morgan at the site in picking up and chipping branches. 11. On 25 May 2001, the in-feed chute of the machine was insufficiently long to guard against the rapid intake of an operator who had become entangled in material being fed into the machine. 17. As at 25 May 2001, the Defendant had not developed any adequate formal safety operating procedures relating to the use of the machine. As at 25 May 2001, Mr Morgan had not seen the user manual. This is despite the fact that on 17 May 2001, Mr Barry Butterfield, an employee of Integral Energy, whilst working with Mr Morgan was pulled into a Model 10 Morbark Woodchipper, Serial No. 4S8SZ 131ZVW021391. Eighty stitches were placed in Mr Butterfield's arm and 38 stitches were placed in his head as a result of the injuries he received. 18. On 25 May 2001, the Defendant, being an employer at the said site, contrary to Section 15(1) of the Occupational Health & Safety Act, 1983 (NSW), failed to ensure the health, safety and welfare at work of all its employees, and in particular, Mr Alan Morgan, in that it failed to:- a) provide or maintain plant, to wit a Model 65 Brush Bandit Woodchipper; Unit No. 32477 (registration number K41353) ("the machine") which was operated by Mr Morgan, that was safe and without risk to health. 13 In addition to the agreed statement of facts the Prosecutor tendered: (a) a factual inspection report by Inspector R A Walker dated 7 June 2001 relating to the use of the machine on 17 May 2001; (b) seven coloured photographs of the Morbark machine; (c) a factual inspection report by Inspector R A Walker dated 7 June 2001 relating to the use of the machine on 25 May 2001; (d) 15 coloured photographs taken by Inspector Walker on 25 May 2001 showing a Brush Bandit Model 65 Woodchipper owned by Kennards Hire being the woodchipper hired to Integral Energy (photographs 1-5); photographs 6 - 15 related to a second Brush Bandit, Model 65 Woodchipper observed at Kennards Hire, Minto. 14 The evidence for the defendant consisted of an affidavit of Graham Patrick Dean, the Chairperson of the defendant who was not required for cross-examination. In his affidavit, Mr Dean described the establishment of the defendant in 1996 as a non-profit organisation with an aim of achieving the placement of long term unemployed persons in employment through labour hire by allowing the person to gain skills and experience with a business. 15 Mr Dean's experience is that many people who are placed in labour hire with a business, obtain employment with that business. Mr Alan Morgan is one employee who obtained employment with Integral Energy after being placed with that business. The defendant does not charge a business any fee if the employee becomes employed by the business. During the period 1 July 2000 to April 2004, 214 people were employed by the defendant and placed in 19 different business/industry categories. 16 Mr Dean said that shortly after it was established, the defendant adopted an occupational health and safety policy which was annexed to his affidavit. Mr Dean said that Integral Energy first required employees of the respondent to have woodchipping skills in 1999 when Integral Energy arranged and paid for woodchipper training by an Integral Energy Trainer, Mr G Flood. This was undertaken at Integral depots at Katoomba and Minto. Details of the training course were sent to the defendant on 9 August 1999, a copy of the material concerning training for a woodchipper was annexed to Mr Dean's affidavit. 17 In relation to the circumstances surrounding the incident on 17 May 2001, Mr Dean said that in January 2000 the depot foreman with Integral Energy advised the defendant that it wished Mr Morgan to undertake chipping work. Pursuant to a new arrangement the Defendant arranged and paid for the training using the same trainer as Integral had previously used, namely, Mr Geoff Flood. This training occurred on 18 January 2000. The defendant received an email from Integral Energy advising of the accident on the morning of 17 May 2001. The defendant was advised that the woodchipper had been impounded by the WorkCover Authority. Integral Energy advised that it would not undertake any further chipping until the cause of the accident had been found and the woodchipper returned or replaced. 18 Mr Dean said that the defendant was never informed that chipping had been resumed by Integral Energy and that another chipper had been procured or that the defendant's employees had been re-engaged in chipping. In anticipation that chipping would recommence, in about June 2001, training was organised by the Defendant on a Bandit 150XP14433 Woodchipper. Mr Morgan undertook this training on 27 June 2001. Mr Dean said that the defendant was not aware of the incident involving Mr Morgan which occurred on 25 May 2001 until advice was received by the WorkCover Investigator on 3 December 2001. 19 Mr Dean said that he, the Board and staff, were conscious of the seriousness of the incident involving Mr Morgan and the subsequent incident with the woodchipper. A new arrangement with "clients" using the defendant's employees has been adopted. The clients have been advised that the defendant must be notified of any changes with equipment used by the defendant's employees so that the defendant can take steps to ensure the safety of its employees. Employees have also been advised about the need to ensure that they contact the manager before they use any new equipment. 20 Mr Dean said that the defendant has decided to withdraw from some areas of business where it is felt the capacity to manage potential risks to employees is not sufficient to meet the legislative requirements. Integral Energy has been notified that the defendant will not supply employees beyond 30 June 2004. 21 Since 2001 the defendant has substantially revised its occupational health and safety policy and procedures. A copy of the current policy and procedures was exhibited to Mr Dean's affidavit. Mr Dean said: "The board deeply regrets that it has taken these incidents to make it appreciate the need to change the Defendant's procedures to ensure the safety of the employees it places with other employers." Submissions of the Parties 22 Mr P Skinner of counsel appeared for the prosecutor. The main points of Mr Skinner's submission may be summarised as follows: · Reliance was placed upon Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 and Swift Placements Pty Ltd v WorkCover Authority of New South Wales (Inspector May) (2000) 96 IR 69 which established the principle that labour hire companies have an obligation to ensure the safety of their workers on the sites they work at. · The defendant had not complied with its obligation under the Occupational Health & Safety Act 1983 ensuring the Morbark Woodchipper was safe. · The Court was referred to a number of cases involving woodchipping machines to emphasise the obligations imposed by the Act: WorkCover Authority of New South Wales v Yass Shire Council (2000) 99 IR 284; WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd (2001) 105 IR 81; Inspector Wilkie v Batequip Pty Limited (formerly Bateman Equipment Pty Limited T/as Ditch Witch Australia NSWIRComm 111). · The primary factor to be considered in determining the appropriate sentence is the objective seriousness of the offence. Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464. · The approach that the Court should adopt in respect of sentencing is to be found in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610, (2000) 99 IR 29. · The risk to workers was high and the offence on 25 May 2001 was more serious than occurred eight days earlier. · A conviction in respect of the incident on 17 May 2001 triggers s 51A of the Occupational Health and Safety Act 1983 - the maximum penalty for the first offence is $550,000; the maximum penalty for the second offence is $825,000: Inspector Jones v Supercut Concrete Service Pty Ltd [2004] NSWIRComm 83 was distinguishable on the facts. · The risk was known to the defendant. The fact that the risk was not only reasonably foreseeable but that it had actually been identified as a risk to safety on 17 May 2001 puts the offence on 25 May 2001 at the more serious end of the range. · These are distinct offences involving different machines. · The defendant entered an early plea of guilty and is entitled to a discount on the sentence imposed. · The defendant co-operated with the WorkCover Authority. · The prosecutor seeks a moiety of the fine and costs. 23 Mr R Reitano of counsel appeared for the defendant. Mr Reitano's submissions may be summarised as follows: · The primary factor to be considered in determining the appropriate penalty for an offence is the objective seriousness of the offence (see Lawrenson Diecasting Pty Ltd at 474 ; Fletcher Construction Australia Ltd v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66 at 77-81). · The gravity of the consequences of an accident does not, of itself, dictate the seriousness of the offence. · The Court should have regard to the foreseeability of the actual risk which is the subject of the charge and should not be distracted by other theoretical possibilities, or indeed, the immediate causes of an accident in assessing the foreseeability of the risk in question (see WorkCover Authority of New South Wales (Inspector Moore) v Blacktown City Council (2003) 124 IR 59. · The risk is far from obvious, particularly in circumstances where operators are trained in the use of the Morbark Woodchipper and it is being used properly. Here the defendant's employee was not injured and it was submitted that it could not be said with any confidence that the risk to which Mr Morgan was exposed was the same as that which affected Mr Butterfield. Mr Morgan was trained in the use of woodchippers. · In relation to the offence that is alleged to have occurred on 25 May 2001, there was no entanglement of anyone and nor was anyone rapidly drawn into the Brush Bandit Woodchipper. · Guidance in respect to the nature and seriousness of the offence may be gained by having regard to fines imposed in matters involving woodchipping machines. See Yass Shire Council where the Council was fined $45,000 in respect of each offence involving a woodchipping machine; Inspector Lyons v Active Tree Services Contracting Pty Ltd [2002] NSWIRComm 311 where Peterson J fined a defendant $55,250 in respect of an inadequate guard on a woodchipping machine; Arbor Products International (Australia) Pty Ltd where the defendant was fined an amount of $30,000 in respect of inadequate guarding on a woodchipper machine; Batequip Pty Ltd (formerly Bateman Equipment Pty Ltd) T/as Ditch Witch Australia where Boland J fined the supplier of the Morbark Woodchipper, arising out of the very same incident in this matter, an amount of $45,500. · The defendant is a first offender. · In respect of specific and general deterrence, a fine will operate as both a specific and general deterrent. · The defendant has withdrawn from various activities and has revised its occupational health and safety policies and procedures after May 2001. · The principle of totality should be applied. WorkCover Authority of New South Wales v Waugh (1995) 59 IR 89 at 100. · The defendant entered a plea at the earliest opportunity available and has an exemplary safety record. · The defendant has co-operated with WorkCover and has put in place steps to ensure that incidents of this kind will not occur again in the future. · The defendant is contrite. · The defendant is a non profit organisation which has as its objective the socially worthwhile function of placing long term unemployed people in a position where they can secure permanent employment. · The defendant has limited means. See WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284 at [83] - [86] and WorkCover Authority of New South Wales (Inspector Barbosa) v Newstart 150 Pty Ltd (2002) 113 IR 78 at [104]. Principles Applicable to Sentencing under the OH&S Act 24 The general principles to be applied in sentencing offenders under the Occupational Health & Safety Act are well established and are set out comprehensively in Lawrenson Diecasting. See also Capral Aluminium at [53]; State Rail Authority of New South Wales v WorkCover Authority of New South Wales (Inspector Dubois) (2000) 102 IR 218 at 230; Schrader at 297 and WorkCover Authority of New South Wales (Inspector Buggy) v Weathertex Pty Ltd (2003) 127 IR 60. 25 The primary factor in assessing the level of penalty to be imposed is the objective seriousness of the offence. The Full Bench in Lawrenson Diecasting stated at 475: As we have observed, the primary factor to look at in relation to the penalty to be imposed is the objective seriousness of the offence. Particularly in cases involving a serious breach of the OH&S Act, subjective factors, such as a plea of guilty, co-operation with the investigation and subsequent measures taken to improve safety, must play a subsidiary role in the determination of penalty to the gravity of the offence itself. While the Court must keep in mind not only facts which establish the seriousness of the offence, but also those which tend to mitigate that seriousness or exculpate the offender (see Camilleri's Stock Feeds Pty Ltd v Environmental Protection Authority (1993) 32 NSWLR 683 at 698 per Kirby P), the presence of the subjective factors referred to should not be permitted to produce a sentence which fails to adequately reflect the seriousness of the offence. 26 As Wright J, President observed in Yass Shire Council at [27]: The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of the penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety. In terms of general sentencing policy and as required by s 6 of the Fines Act 1996, the Court is required to consider the means of the defendant in terms of such information as is reasonably and practicably available to the Court for this purpose. 27 I propose to apply the principles as summarised, and as elaborated upon in the judgments referred to above, for the purposes of assessing penalty in this matter. 28 There are, however, particular difficulties raised by this matter which involve imposing fines upon the defendant for two offences which arise out of the same factual matrix but which are separated by eight days. In this case, the prosecution submitted that, given there were two offences, s 51A of the Act applied and in respect of the second offence a maximum penalty of $825,000 applied. The prosecutor submitted that, at the time of imposing a sentence in respect of the second offence, the defendant's previous conviction in respect of the first offence means that s 51A is attracted. The defendant submitted the prosecutor was wrong and that there were two offences, each attracting a maximum penalty of $550,000. 29 Section 51A of the Occupational Health & Safety Act 1983 provides as follows: 51A Additional penalty for further offence against the Act (1) A Court that convicts a person of an offence (the current offence) against this Act may, if the person has previously been convicted of an offence against this Act (whether the same offence or another), impose as additional penalty in respect of the current offence not exceeding the following penalties: (a) if the current offence is an offence against section 15, 16, 17 or 18 of this Act -- 2,500 penalty units in the case of a corporation or 250 penalty units or 2 years imprisonment, or both, in any case, or (b) if the current offence is any other offence against this Act - 50% of the maximum penalty for the offence (that is, 50% of the maximum penalty that would apply but for this section). (2) For the purposes of section 47 (Summary procedure for offences), the maximum penalty provided in respect of an offence is, in the case of an offence to which this section applies, taken to include any additional penalty that may be imposed under this section. (3) This section applies even if the previous offence concerned was committed before the commencement of this section. 30 The prosecutor submitted that the offences were distinct, involving different machines, the only common feature being the involvement of Mr Morgan. 31 The prosecutor referred to the judgment of Boland J in Supercut Concrete Service Pty Ltd submitting that case was distinguishable. 32 Mr Reitano of counsel submitted: (a) the defendant is a first offender; (b) the maximum fine applicable to it is $550,000; (c) it would be unjust if the first and second offences were treated as giving rise to separate convictions, relying upon the reasons of Boland J in Supercut Concrete Service Pty Ltd. 33 Supercut Concrete Service Pty Ltd was prosecuted under s 15(1) and 16(1) of the Occupational Health & Safety Act 1983 in respect of two offences that occurred on 18 February 2000. 34 Boland J said at [37]: Despite the difficulties associated with interpreting s 51A of the Act I do not consider it was the legislature's intention that where: · a defendant committed simultaneous offences under s 15(1) and 16(1) in circumstances where the defendant had no previous convictions; · the offences arose out of the same factual matrix; · there was a substantial overlap between the failures charged in the two offences; · the two offences were effectively prosecuted as one, that whichever of the two offences was first recorded as a conviction becomes a previous conviction for the purposes of s 51A. 35 His Honour, in order to avoid any doubt, which he considered would lead to a most unjust outcome, recorded the convictions simultaneously and determined that s 51A of the Act had no application to either of the offences in the proceedings. 36 Section 51A is directed to repeat offences. In Capral the Full Bench considered the constraints of s 51A and rejected an argument that the Court has a discretion as to whether or not it will or may impose the additional penalty. Wright J President, Walton J Vice-President, and Kavanagh J said at [51]: We consider that the use of the word "as" within the phrase "... may ... impose as additional penalty ..." also evidences an intention on the part of Parliament to increase the maximum penalty in the relevant circumstances, when that phrase is read in the context of the terms of s 51A(2). If Parliament had intended that there would be a discretion as to what the maximum penalty was in the case of a "repeat offender", it would have been unlikely to have used the word "as" in that situation, but would rather have used the word "an". 37 This matter, in my view, is not dissimilar to the situation considered by Boland J in Supercut Concrete Service Pty Ltd. I respectfully agree with his Honour and adopt his approach. I propose to record convictions simultaneously and determine that s 51A of the Act has no application to either of the offences. Consideration 38 The defendant in this matter has pleaded guilty to the charges and the particulars which, in essence, were that the in-feed chute of the machines were insufficiently long to guard against the rapid intake of an operator who had become entangled in material being fed into the machine; lacked an easily accessible safety mechanism and that the defendant had not developed any adequate formal safety operating procedures relating to the use of the machines. 39 This is the risk identified by the prosecutor. 40 The responsibility of labour hire companies to ensure the health, safety and welfare of their employees performing work at clients' premises has been considered by this Court in a number of cases including by a Full Bench in: Drake Industrial v Ch'ng where the majority observed at 456: ... A labour hire company is required by the OH&S Act to take positive steps to ensure that the premises to which its employees are sent to work do not present risks to health and safety ... to ensure that its employees are not instructed to, and do not, carry out work in a manner which is unsafe. 41 The Morbark Woodchipper and the Model 65 Brush Bandit Woodchipper are inherently dangerous machines. This is recognised by the warning signs on the side of the machines, one showing a person being dragged by the arm into the machine, the other a hand being dragged into the machine. The evidence discloses that Mr Morgan was trained in the use of woodchippers and his use of the woodchipper on the days in question did not relevantly result in any injury to him. However, the gravity or otherwise of the potential risk to safety flowing from a breach is relevant as a measure of the gravity of the breach and culpability of the defendant: Lawrenson Diecasting. 42 On 17 May 2001, an employee of Integral Energy, Mr Butterfield suffered injuries to his right hand, arm and body as they were dragged into the machine when the glove on his right hand became caught on a branch. Although the Court is unaware of the training undertaken by Mr Butterfield, the possibility of an employee's glove being caught in a branch or material, resulting in that employee being dragged into a woodchipping machine, illustrates that the defendant was culpable in exposing Mr Morgan to a risk to safety. There is no suggestion that Mr Morgan was not using the Morbank Woodchipper properly on 17 or 25 May 2001. 43 Mr Reitano submitted that it is not appropriate for the Court to speculate as to the likelihood of workers' gloves being caught in branches and therefore, the foreseeability of "entanglement" in material is difficult to determine. I do not agree with this submission. In my view it is foreseeable that a person wearing gloves would be caught and dragged into the machine due to the fact that the in feed chute of the machine was insufficiently long and the machine lacked an easily accessible safety mechanism. 44 In respect of the offence which occurred on 25 May 2001, there was no entanglement of anyone, nor was anyone rapidly drawn into the Brush Bandit Woodchipper. However, the risk of entanglement on branches, or material, in my view, is an obvious risk in light of the in-feed chute being insufficiently long. 45 In respect of this issue, Inspector Walker's report commented "from where the tapered sides of the feed chute meet the vertical side part of the chute the distance to the feed roller is approximately 800 mm and is in easy reach while standing on the ground, at the sides. This distance should be at least 1200 mm to 1300 mm to place the danger zone out of reach". 46 Mr Skinner described this concept as "guarding by distance". 47 There can be little doubt that the proper guarding of both woodchippers would have eliminated the relevant risks completely and guaranteed Mr Morgan's safety as the Act requires. 48 The defendant was obviously of the belief that while the machines were dangerous if not used properly, the risks it posed to operators were minimised, as far as practicable, by training. Mr Morgan obtained training on 18 January 2000 specifically in respect of undertaking woodchipping work. After the incident on 17 May 2001, the defendant was advised that the Morbark Woodchipper had been impounded by WorkCover and that Integral Energy would not undertake any further chipping until the cause of the accident had been found and the chipper was returned or replaced. The defendant was advised that the results of the investigation would be conveyed to it. The defendant organised for Mr Morgan to undertake further training on a Bandit Woodchipper in anticipation that chipping would recommence in or about June 2001. The defendant was not informed that chipping had been resumed shortly after 17 May 2001. 49 The question arises as to the weight to be given to deterrence in the sentencing process. As to general deterrence, I am guided, indeed bound, by what was said by the Full Bench in Capral Aluminium Ltd at [71] - [80], namely, that the important consideration is to set the penalty at a level that will realistically operate as a deterrent but not so high as to be oppressive. 50 As to specific deterrence, I take into account that the defendant is a first offender and that the defendant has taken steps to withdraw from supplying labour to certain businesses where it is thought that it's capacity to manage potential risks to employees is not sufficient to meet the legislative requirements. On 30 June 2004 the defendant will cease supplying labour to Integral Energy. Examples of other businesses where the defendant has declined to supply labour were also given. The defendant has also revised its occupational health and safety policies and procedures since May 2001. 51 Mr Reitano submitted that the principle of totality should also be applied in the circumstances of this matter. The relevant principle was stated by a Full Court in WorkCover Authority of New South Wales v Waugh (1995) 59 IR 89 at 100 where the Court said: The principle of totality allows a Court in sentencing to avoid a straightforward arithmetical addition of sentences appropriate to each individual offence where the offences are similar, thus avoiding doubling of the penalty by enabling the judge to consider a single overall penalty which includes the circumstances of a second or further offence. 52 Clearly, both offences that arise in this matter are similar and the statement of facts in each matter highlights the relevant similarities and the interrelationship between the two prosecutions. I propose to apply the principle of totality being mindful of what the High Court said in Pearce v The Queen (1998) 194 CLR 610 which I refer to later in this judgment. 53 A Full Bench, Wright J President, Walton J Vice-President, Hungerford J in Crown in Right of the State of New South Wales (Department of Education and Training) v Keenan (2001) 105 IR 181 at 194 discussed the principle of totality concluding that the preferable course is that separate penalties should be imposed after the principle of totality is applied. 54 There are a number of subjective considerations to be taken into account. Firstly, the defendant entered early pleas of guilty and I find such pleas should attract a discount for the utilitarian value (See R v Thomson, R v Houlton (2000) 49 NSWLR 383 and R v Sharma (2002) 54 NSWLR 300). Secondly, the defendant has no prior convictions under the Act. Thirdly, the defendant has co-operated with WorkCover in both its investigation and the conduct of these proceedings. Fourthly, the defendant has expressed contrition. In addition, the defendant is a non-profit organisation which has as its objective the socially worthwhile function of placing long term unemployed people in a position where they can secure permanent employment. 55 The evidence of Mr Dean was that the defendant employs one full time and four part time employees on its staff and has limited means. 56 Walton J Vice-President discussed the approach that should be adopted in considering the financial means of the defendant in mitigation of penalty in WorkCover Authority of New South Wales (Inspector Farrell) v Schrader (2002) 112 IR 284. His Honour said at [83] ... ... I would adopt what I stated in Department of Mineral Resources v A M Hoipo & Sons (at par 50): "It is proper, nonetheless, to have regard to the financial position and means of the defendant when considering the question of penalty: see Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209. The purpose of a fine is primarily to punish the offender. The burden which will be imposed by virtue of a fine at a particular level will, to some extent, depend upon the financial circumstances and resources of that offender. As a result, the amount and method of payment of a fine will need to take into account, as far as practicable, the financial resources and income of the defendant: see R v Sgroi (1989) 40 A Crim R 197 at 200-201". 57 His Honour noted that this approach was subsequently adopted in Manpac Industries Pty Ltd v WorkCover Authority of New South Wales (Inspector Glass) (2001) 106 IR 435 where the Full Bench of this Court stated [81]-[82]: "... Section 6 of the Fines Act 1996 provides that in exercising a discretion to fix the amount of any fine a court is required to consider the means of the accused and such other matters as are relevant to the fixing of that amount. That statutory injunction, of course, has long been recognised as an appropriate part of the sentencing process: see, for instance, Warman International (80 IR at 339); WorkCover Authority (NSW) (Inspector Dowling) v Overtop Pty Ltd (1998) 86 IR 319 at 333; and Profab Industries (49 NSWLR at 714; 100 IR at 76). However, and given the primacy of the objective seriousness of an offence in determining an appropriate sentence, the financial situation of a defendant, in our view, needs to be carefully scrutinised. In Ferguson v Nelmac Pty Ltd (1999) 92 IR 188 at 209-210, Wright J, President observed: '... Whilst I accept that the imposition of heavy fines would be a burden on the defendant and its financial resources and that consideration should be given appropriate weight on the question of penalty, it does not necessarily result in the Court not imposing a heavy penalty... ... When viewed in the context of the statutory mandate in s 15 the offences were very serious and provided proper weight is given to the subjective considerations and insofar as deterrence is concerned some tempering thereof, the penalty should reflect the objective seriousness of the offence ....' '' 58 Having regard to the aforementioned authorities regarding the relevance of the financial means of a defendant, I shall reduce the amount of fine which would have otherwise been ordered to be paid by the defendant due to the defendant's limited means. Given the early plea of guilty I would also allow a discount of 25% with a further discount of 10% for the other subjective factors to which I have referred. 59 Taking all these matters into account the assessment of each of the offences is to be approached in accordance with the principles set out in Pearce. This decision of the High Court was discussed by a Full Bench of this Court in Keenan where Wright J President, Walton J Vice-President, Hungerford J, after referring to a number of judgments of the Court which applied the principle of totality to multiple offences under the Act said at 194: In view of these authorities and the judgment in Pearce itself, we do not accept the appellants' submission that, in accordance with the decision in Moore v EW Cox Pty Ltd , her Honour should have imposed a single penalty covering both offences. To the extent that previous decisions such as Moore fail to consider separately the appropriate penalty for each offence before applying the principle of totality, they adopt an approach which is no longer available subsequent to the judgment in Pearce. 60 It is therefore necessary to assess the appropriate penalty in relation to each charge and apply the principle of totality. I have concluded that each of the charges are to be regarded as equally serious. Having due regard to the various mitigating factors referred to, and the particular circumstances of the defendant, the appropriate penalty, allowing for a discount of 35%, in relation to the charge in matter no IRC 2599 of 2003 is $35,000 and the penalty, allowing for a discount of 35%, in relation to the charge in matter no IRC 2600 of 2003 should also be $35,000. The principle of totality, requires consideration of the overall culpability or criminality attributable to the defendant from both convictions, and in that process ensures that there is no "double counting" of the culpability of the defendant from the respective offences. 61 I consider that the overall culpability of the defendant would result in a total fine of $50,000. Having regard to the separate assessment of the culpability of the defendant in relation to the two offences, fines of $25,000 should be imposed in each matter. ORDERS The court makes the following orders: Matter No IRC 2599 of 2003 - Greater Lithgow Skills Training Inc: 1. The offence is proven and a verdict of guilty is entered. 2. The defendant is convicted of the offence as charged. 3. The defendant is fined an amount of $25,000 with a moiety thereof to the prosecutor. 4. The defendant shall pay the prosecutor's costs of the proceedings in an amount, as agreed or, if agreement cannot be reached as determined in accordance with the Rules of the Court. Matter No IRC 2600 of 2003 - Greater Lithgow Skills Training Inc: 1. The offence is proven and a verdict of guilty is entered. 2. The defendant is convicted of the offence as charged. 3. The defendant is fined an amount of $25,000 with a moiety thereof to the prosecutor. 4. The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed or, as determined in accordance with the Rules of the Court. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.