Industrial Relations Commission of New South Wales in Court Session CITATION : Inpector Amanda Templeton v Pirelli Cables Australia Limited [2003] NSWIRComm 177 Prosecution: PARTIES : Inspector Amanda Templeton Defendant: Pirelli Cables Australia Limited FILE NUMBER: IRC7735 of 2001 CORAM: Kavanagh J CATCHWORDS : Section 15(1) offence under Occupational Health and Safety Act 1983 - failure of defendant company to ensure the safety of employees in a system of work which required movement of persons and equipment over unsecured metal plates covering a lubricant pit - failure to conduct an adequate risk assessment - failure to warn employees of known risk to safety associated with work on or near lubricant pits covered with unsecured metal plates before incident - failure to address known risk as revealed in breach until after question of liability is determined - without risk assessment, risk to safety at worksite continued - subjective features considered - penalty LEGISLATION CITED : Occupational Health and Safety Act 1983 Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 CASES CITED : Capral Aluminium Limited v. WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610, (1999-2000) 99 IR 29 R v Thomson, R v Houlton (1999-2000) 49 NSWLR 383, (2000) 115 A Crim R 104 Caltex Refining Co Pty Limited v Maritime Services Board of NSW (1995) 36 NSWLR 552 HEARING DATES: 04/24/2003 DATE OF JUDGMENT: 06/06/2003 Prosecutor: Mr A.A. Hatcher of counsel Solicitors: Phillips Fox LEGAL REPRESENTATIVES: Defendant: Mr J. Galluzzo Solicitors: Sparke Helmore JUDGMENT: - 6 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: KAVANAGH J Date : Friday 6 June 2003 IRC7735 of 2001 INSPECTOR AMANDA TEMPLETON v PIRELLI CABLES AUSTRALIA LIMITED Prosecution under s15(1) of the Occupational Health and Safety Act 1983 JUDGMENT (as to penalty) [2003] NSWIRComm177 1 The court published judgment in this matter as to liability on 20 December 2002 (see [2002] NSWIRComm371). The defendant company was charged under the provisions of s15(1) of the Occupational Health and Safety Act 1983. It was alleged: . . . , Pirelli Cables Australia Limited (ACN 001 313 551), an incorporated company with its registered office located at Harwoods Chartered Accountants, Suite 6, 203 The Entrance Road, Erina in the State of New South Wales, an employer, breached s15(1) of the Occupational Health and Safety Act 1983 on 22 January 2000 at premises located at 1 Heathcote Road, Liverpool in the State of New South Wales, in that it failed to ensure the health, safety and welfare at work of its employees, in particular Dawood Ablakatef. Particulars of the defendant's breach as alleged were: (a) The Defendant failed to ensure a system of work for working on or near metal floor plates covering disused lubricant pits ("the pits") at the premises that was safe and without risks to health. (b) The Defendant failed to secure the metal floor plates in a manner which ensured there was no risk to the health and safety of employees working on or near the pits. (c) The Defendant failed to ensure that employees working on or near the pits were adequately warned of the risks associated with working on or near the pits. (d) The Defendant failed to conduct an adequate risk assessment concerning the risks posed to employees working or near the pits. (e) As a result of the Defendant's breach, Dawood Ablakatef suffered serious injuries. 2 In the hearing as to penalty appearances were as before. Mr A.A. Hatcher, of counsel, appeared for the prosecution and Mr J. Galluzzo, of counsel, appeared for the defendant. Mr Hatcher tendered the industrial record of the company. Mr Galluzzo tendered the Affidavit of Kenneth Francis Powell sworn 17 April 2003 and two company reports one entitled "Grading Audit Report" and the other entitled "Surveillance Audit Report & 1999 Grading Summary". 3 In its determination as to penalty, the court must first assess the nature and quality of the offence, that is the gravity of the offence. As was held in Lawrenson Diecasting Pty Limited v WorkCover Authority of New South Wales (Inspector James Swee Ch'ng) (1999) 90 IR 464 (at 474): ... 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' ... 4 The evidence revealed the metal plates which covered lubricant pits under the factory floor could move and twist when weight passed across them. Further, the company was aware of this risk to safety as some of the plates, after movement, had been secured to the floor prior to this incident on 22 January 2000. The risk to safety was identified as an instability related to the metal plates moving, twisting and swivelling if walked upon or crossed by heavy equipment such that the movement could cause its employees to suffer a risk of injury. The risk was especially so if that movement exposed the pit below over which the metal plate sat. 5 There was therefore a foreseeability element to this offence as the instability of the floor plates was within the knowledge of the defendant and the defendant company had always been able to make provisions to eliminate the identified risk. The defendant company had secured other plates which had been disturbed when crossed by heavy equipment. The manner in which such plates were secured was varied. 6 The court assessed the failures as a system of work failure; a failure to properly warn the employees and a failure to conduct a risk assessment related to the securing of all plates. 7 While there was a system of work in place for reporting workplace safety incidents, the court found that system of work placed the onus on employees to identify risk and the system itself was reactive rather than proactive. 8 In the circumstances, given the knowledge of the defendant company of this risk to safety, and the easy and practical way available to secure the plates, I find this a serious offence. 9 A level of deterrence must be factored into consideration as to penalty. Such a principle was recently cited by the Full Bench of the Commission in Court Session with approval in Capral Aluminium Limited v. WorkCover Authority of New South Wales (Inspector Mayo-Ramsay) (2000) 49 NSWLR 610; (1999-2000) 99 IR 29 [at 74] where it was said: The ... Court should take in relation to the question of deterrence, both general and personal or specific, when sentencing an offender in relation to a serious breach of the legislation. It follows that both aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Page v Walco Hoist Rentals Pty Limited [No 2] [2000] NSWIRComm 39 at 40-43). We would expect such cases to be very rare. 10 In consideration of penalty a number of subjective features to the offence were placed before the Commission in Court Session. In Lawrenson Diecasting 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. 11 I accept, through the evidence of Kenneth Francis Powell, Quality, Health, Safety and Environmental Manager of Pirelli Power Cables, that Pirelli took over the Liverpool site and along with that purchase a hazard survey was conducted on the site before sale. The survey did not identify the metal plates as posing any risk to safety. 12 I accept further, as part of the pre-existing Occupational Health and Safety Policy of the defendant company in place at the time of the breach there was an occupational health and safety committee which was active on site. However, there were limitations to the effectiveness of the procedures in place when the operation of this committee was examined. Evidence revealed the committee met within a few days of the incident on 27 January 2000 but the incident in which Mr Ablakatef suffered injury was not recorded nor mentioned in the minutes of the meeting. 13 Of further concern is the stability of all of the metal plates at this worksite were not re-assessed by the defendant company until after judgment was entered as to its liability for this breach. It appears only after judgment was entered was the incident drawn to the attention of Mr N.W. Elliott, Pirelli's Continuous Improvement Manager. He was only called to give evidence by the defendant company after this court made an inquiry as to when the other metal plates on the factory floor were risk assessed. Mr Elliott revealed he is currently working in Pirelli's occupational health, safety and quality control department. Mr Elliott said, when asked when the first internal survey was completed in relation to the stability of the metal plates in the factory floor: . . . This year. To be quite frank with you, the first I was aware of the whole thing was with your Honour's ruling and judgment. I had no prior knowledge before that. So from my point of view one of my roles was to try to reduce risks and I set about doing a survey of all pits and troughs and what have you (sic) across the whole site. As to the breadth of the survey he said: To the best of my knowledge we covered every plate and trough we could find that covered a pit and in other cases there were plates that were simply worn. He revealed while this was only done in the year 2003 at least 98% of the rectification work, identified as a risk to safety in the survey, has now been completed. 14 As a matter of practicality Mr Elliott's appearance on the Liverpool site seems to me to have been effective in placing a positive and pro-active emphasis on occupational health and safety. I am satisfied through Mr Elliott's endeavours, a rigorous review has now taken place as to the state of these metal plates and the risks to safety they presented has now been addressed. I am further satisfied that the attendant Occupational Health and Safety policies and procedures of the defendant company have been updated and are now directed to the responsibilities and onus carried by the employer under the Act in identifying work hazards and risks to safety. The burden of ensuring site safety is now no longer carried solely by employees although the tool box meetings and safety committee meetings ensure employees views are taken into account in defining procedures for site safety. 15 Evidence revealed the defendant company, as to specific deterrence, put in place some barriers to assure immediately after the incident, that other heavy equipment did not pass over the unsecured metal plate around the "P" machines. Further, in July 2001 Pirelli introduced a new Occupational Health and Safety Policy relevant to the Liverpool site. It was revised and re-issued in December 2001. I accept a number of the procedures that are site specific have been revised to ensure the onus reflects the employer's obligations under the Act yet continue to involve the employees allowing them an influential role as to the design and implementation of safe systems of work. The use of the "buddy system" to train new employees especially for work around dangerous machinery is a significant policy implementation. 16 As to general deterrence, it must be acknowledged the level of penalty applied to the breach should compel attention to occupational health and safety standards and must reflect the seriousness of the breach. 17 The corporate character of the company is also relevant. Pirelli Telecom Cables and Systems Australia Pty Limited has operated at Liverpool since 1940. There were various amalgamations and takeovers. The present company took control of the Liverpool site on 1 April 1999. Pirelli Cables Australia Limited, the defendant company, was incorporated in 1975 and commenced business in 1976 at a greenfield site in Minto, New South Wales. 18 In January 2000 there were approximately 514 people employed by the defendant company at the Liverpool site. The site is also used as the administrative site for Pirelli group's Australian cable operations. Therefore, on site are a high percentage of salaried employees. In 2002 the site produced 40,000 net tonnes of cable. 19 The company has a fine corporate reputation and employs a significant workforce in the needs areas of Western Sydney which is to be commended. 20 The industrial record of the company is also relevant. There have been three registered breaches of the Occupational and Safety Act 1983 and two registered breaches of the Factories Shops and Industries Act 1962 by Pirelli associated companies. The WorkCover Authority chose to bring all such breaches before the Industrial Magistrate where small monetary penalties were applied. The company has admitted a further breach in 1996. From 1996 until the present incident there have been no recorded incidents. 21 The breach therefore attracts the provision of s51A of the Act which determines, given the prior convictions for breaches of the Act the maximum penalty shall be up to $825,000. There shall be no discount for the utilitarian value of a plea (see R v Thomson; R v Houlton (1999-2000) 49 NSWLR 383; (2000) 115 A Crim R 104). 22 The prosecution submitted concomitant with no plea of guilty to the charge the court would not attach any significant reduction in penalty by reason of the defendant company's expression of contrition or remorse. In consideration of such a submission, the prosecution relied upon the fact Mr Elliott's expression of contrition followed only after the offence was proven. However, the injured employee was given the appropriate care and assistance by the company. I accept, further, every opportunity was provided to the employee through a return to work programme. The defendant company, it is agreed, co-operated with the WorkCover Authority. 23 The defendant company operates in a high risk area of industry. Since 1996 it presents with a good corporate and industrial history. This is a reflection of its stated commitment to occupational health and safety even if, in its implementation at the worksite level, the systems in place at times have been found to be not all encompassing. 24 I take into account the subjective features placed before the court as referred to above in mitigation of penalty with the assessment as to the gravity of this offence. The evidence demonstrated the company had a genuine commitment, in principle, to the concepts of occupational health and safety. However, when putting into effect these principles their operations at the workface revealed some adjustments were needed. I am persuaded the defendant company has now fully addressed its obligations to provide safe working. I do however take into account as to specific deterrence no risk assessment was conducted by the defendant company on the other metal plates on site until after the issue as to liability for the alleged breach was determined by the Court. At this worksite, as a result of this decision by the defendant company, there was left in place a known risk to safety for three years. This, in the circumstances, was not an acceptable occupational health and safety practice. 25 I find the defendant guilty. 26 The defendant is fined in the sum of $135,000 with a moiety to the WorkCover Authority. 27 I Order the parties to meet in relation to the Order as to Party and Party costs to the defendant. In accordance with the view expressed in the Caltex Refining Co Pty Limited v Maritime Services Board of NSW (1995) 36 NSWLR 552, this Court is obliged to give specific Orders related to costs with a quantification as to those costs. I require the parties to conciliate on this issue. If the parties are in dispute I advise the parties to seek the assistance of the Registrar of the Court as a prelude to the court making any final cost Orders as to the quantification of costs which are "just and reasonable" on a party and party basis. Leave is granted to the parties to re-list as to costs. Orders: 1 The defendant company is convicted of the offence as charged under s15(1) of the Occupational Health and Safety Act 1983. 2. The defendant is fined the sum of $135,000 with moiety thereof to the prosecutor. 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.