Industrial Relations Commission of New South Wales in Court Session CITATION: Inspector Hannah v Patersons Transport Pty Limited [2005] NSWIRComm 348 PROSECUTOR Inspector Ian Hannah PARTIES: DEFENDANT Patersons Transport Pty Limited FILE NUMBER(S): IRC 6034 of 2004 CORAM: Boland J CATCHWORDS: Occupational Health and Safety - Prosecution under section 8 (1) of the Occupational Health and Safety Act 2000 - Employee sustained severe injuries when mobile auger collapsed on him - Transport industry - Plea of guilty - Penalty imposed LEGISLATION CITED: Occupational Health and Safety Act 2000 Department of Mineral Resources of New South Wales (Chief Inspector Bruce Robert McKensey) v Kembla Coal and Coke Pty (1999) 92 IR 8 Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 CASES CITED: Inspector Yeung v Howie Herring & Forsyth Pty Limited & Anor [2005] NSWIRComm 266 Rodney Morrison v Powercoal Pty Ltd (2003) 130 IR 364 HEARING DATES: 09/09/2005 DATE OF JUDGMENT: 09/28/2005 PROSECUTOR Mr M Cahill of counsel Solicitor: Mr N Correy Moray & Agnew LEGAL REPRESENTATIVES: DEFENDANT Mr C P Heazlewood of counsel Solicitor: Ms B Pryor Commins Hendriks JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Boland J Wednesday 28 September 2005 Matter No IRC 6034 of 2004 INSPECTOR IAN HANNAH v PATERSON'S TRANSPORT PTY LIMITED Prosecution under s 8(1) of the Occupational Health and Safety Act 2000 JUDGMENT [2005] NSWIRComm 348 1 Paterson's Transport Pty Limited ("the defendant") operates a general carting business in southwestern New South Wales that specialises, in particular, in the delivery of livestock and grain. 2 On 16 October 2002 Mr Danny Stone, an employee of the defendant, drove one of the defendant's trucks to the Boree Creek depot of Graincorp Operations Limited in order to load the truck with grain. The loading was to be done using a vertical post electric screw type grain auger. The screw of the auger was contained within a boom that was approximately 7.8 metres in length. The boom and electric motor that drove the screw were supported by an A-frame structure that was mounted on two 13-inch wheels. 3 During the loading of the truck using the auger, the auger ceased working. Attempts to restart the auger were unsuccessful. Mr Stone and another employee of the defendant, David O'Callaghan, went to assist Graincorp employees to pull the auger free of the silo. As they did so, the auger toppled over causing the A-frame to collapse. Mr Stone was trapped by the auger and sustained severe injuries including fractures to his legs, pelvis and left arm, as well as internal injuries. 4 The defendant was prosecuted under s 8(1) of the Occupational Health and Safety Act 2000. Section 8(1) provides: Duties of employers (1) Employees An employer must ensure the health, safety and welfare at work of all the employees of the employer. That duty extends (without limitation) to the following: (a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health, (b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used, (c) ensuring that systems of work and the working environment of the employees are safe and without risks to health, (d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work, (e) providing adequate facilities for the welfare of the employees at work. 5 The charge alleged that the defendant failed: Contrary to s8(1) of the Occupational Health & Safety Act , 2000 to ensure the health, safety and welfare at work of its employees including Danny Stone ('the worker'), in that the worker while at the said depot for the purpose of obtaining a load of grain for cartage from the depot to a mill at Narrandera pursuant to a contract between the defendant and Graincorp Operations Limited, the worker whilst assisting employees of Graincorp in attempting to move a portable grain auger certified as a 90 TPH Electric Screw Conveyor No DA3327 ('the auger') which had broken down, sustained serious personal injuries, including multiple limb fractures and internal injuries, when the auger upended and collapsed and knocked him to the ground, by reason that: 1. The defendant failed to ensure that the system of work involved in the conduct of its cartage operations at the depot was safe and without risks to health in that: 1. The conduct of the work of assisting with the moving of an auger when there was a risk of it upending and/or collapsing was unsafe. 2. The defendant did not have any system in place for its workers in the field to identify, assess and eliminate or control risks associated with such work. 2. The defendant failed to provide such information, instruction, training and supervision in relation to the work of grain cartage such as may be necessary to ensure its employees' health and safety at work in that: 1. It did not provide proper instructions to its drivers in relation to the risks associated with the movement of augers. 2. It did not provide instructions to its drivers in relation to rendering assistance in loading operations at grain depots. 6 The defendant pleaded guilty to the charge. 7 The evidence in the prosecutor's case included: (1) An agreed statement of facts; (2) A factual inspection report prepared by Inspector Christopher Downie dated 31 October 2002; (3) A series of 29 colour photographs of the accident scene; (4) A WorkCover Safety Alert in relation to the operation of grain augers dated 21 February 1992; (5) A Prior Convictions sheet showing no priors for the defendant. 8 Relevantly, it was agreed in the statement of facts that: 27 At all material times it was not an unknown or uncommon occurrence for an auger of this kind to stop working because of some fault of its internal mechanism. 28 At all material times, in the event of the auger becoming jammed, it was Graincorp's normal procedure to remove the auger from the storage facility so that access could be obtained to the boot and the flight. 29 At all material times on and prior to 16 October 2002 portable augers, including the auger in use in this instance, had a propensity to over balance when being moved with the boom elevated. The propensity to over balance was increased if the boom was elevated and filled with grain. 30 Since 21 February 1992 grain augers had been the subject of a WorkCover Safety Alert to industry representatives using grain augers. This WorkCover Alert highlighted risks associated with: (a) Augers upending while being positioned; (b) The A-frames supporting augers folding after the auger upends. The Safety Alert recommended that all portable augers be fitted with a warning sign in the following terms: 'DANGER Upending Hazard The up take end of the grain auger must always have downward weight. Always test it before releasing it from the vehicle or hold down. Lift the intake slowly and keep it no higher than the vehicle tow bar when attaching or releasing it. Do not attempt to move the auger by pushing the undercarriage. Immediately lower the auger to transport position before moving. Failure to do so will cause upending, which can result in serious injury or death.' 31 Further, the auger involved in the incident, involving injury to the worker and the risk of serious injury to Widdup, Pink and Allen, had previously over balanced several months before the incident on 16 October 2002, at a time when it was being moved by Graincorp's employee, Bill Allen. 32 At all material times, the auger was not fitted with any form of safety alert or warning concerning its tendency to 'upend', either in the terms suggested by the WorkCover Authority or otherwise. 33 At all material times on and prior to 16 October 2002, Graincorp's depot policy for visitors did not mention any requirement which prevented truck drivers contracted to cart grain from the depot to refrain from assisting the defendant's employees in such circumstances as occurred on 16 October 2002. 34 At all material times on and prior to 16 October 2002, Graincorp had no site induction instruction to visiting truck drivers regarding the dangers associated with the instability of and movement of grain augers. 35 At all material times on and prior to 16 October 2002, the defendant had not provided its employees with any direction, instruction or training designed to inform its employees of the dangers involved in handling portable augers, such as the subject auger, including the danger of the auger upending if moved with the boom erect. 36 At all material times on and prior to 16 October 2002, the defendant had not directed its employees not to handle, or to assist in the handling of portable loaders used by Graincorp when attending at Graincorp depots. 37 At all material times the defendant had not taken any steps to ensure that its employees were properly inducted with respect to their attendances at Graincorp's sites, including but not limited to failing to ensure that its employees were aware that they were not to assist in the use, movement and/or handling of equipment located on Graincorp's sites, including but not limited to portable augers of the subject type. 9 For the defendant, four affidavits were read. The deponents of those affidavits were: Alice (known as Jean) Jean Paterson, one of the Directors and Company Secretary of the defendant; Peter Bruce George, Accountant; Kim Cheree Paterson, a Director of the defendant; and, Douglas James Paterson, Managing Director of the defendant. 10 Mr George was unable to attend the hearing for medical reasons and, consequently, Amanda Marie Paterson was called for cross-examination in relation to the financial circumstances of the defendant. 11 Ms Jean Paterson described the history of the defendant company. In 1952, she and her husband were the co-founders of the original company, Paterson & Thompson. Ms Paterson's husband passed away on 11 October 2002. 12 Ms Paterson described the business as being operated by the following companies or entities: (i) Paterson's Transport Pty Ltd currently owns all the business vehicles. (ii) Paterson's Transport Services Pty Ltd employs the employees of the business and conducts the business. (iii) AM, KC & TB Paterson are the registered proprietors of the new Paterson Transport worksite in Driscoll Road, Narrandera and they lease the property to Paterson's Transport Services Pty Ltd. 13 The transport business currently employs 13 drivers (including Douglas, John and Lance Paterson). It also employs three office administration staff, being Amanda Paterson, Tanza Paterson and Kim Paterson and one shed hand. 14 Ms Paterson explained the business recently relocated its operations in December 2004 from its old premises in Boundary Road, Narrandera, to Driscoll Road, Red Hill Industrial Estate, Narrandera, New South Wales. 15 Mr George deposed that: The original data supplied by the business to date indicates that income from freight is reduced from $2,895,378 to $2,746,614, ie a decrease of $148,764 for the year ended 30 June 2005. The MYOB files also disclose, that the expense of fuel has increased from $660,176 to $745,176, being an increase of $85,000. Paterson's are now paying $1.27 per litre for fuel and from 2 September 2005, it will increase by another 4.5c per litre plus GST, making it $1.32 per litre, up from .81c in 2003 and $1.12 in 2004. Fuel costs typically account for almost one third of total costs. The Paterson Group uses approximately 45,000 litres per month and to date have not been able to simply pass on increased costs to the user because of the prolonged drought conditions. In 2004 AM, TB and KC Paterson took out a loan from the Westpac Bank for $350,000 to purchase land and construct a new workshop at the Red Hill Industrial Estate in Driscoll Road. The relocation was required to improve the working conditions of all employees and the productivity of the business. During the construction of the new premises in Driscoll Road, the Paterson Transport Group incurred additional costs in excess of $150,000 over the original estimated cost to comply with occupational health and safety requirements. After the original loan of $350,000 from Westpac Bank was fully expended, the business had to pay for the additional costs out of its cashflow. This placed a drain on the business cashflow and the Paterson Transport Group was unable to meet its commitments for GST and PAYG withholding tax to the Australian Taxation Office. Paterson Transport Group also fell behind in payments to creditors, especially fuel agents, which fell into arrears. In 2005 when the Australian Taxation Office running balance built up, Paterson Transport entered into an agreement with the Australian Taxation Office to offset the Diesel Fuel Rebates that they were previously receiving against the outstanding debt. The Paterson Transport Group has been unable to date, to facilitate an increase in borrowings from the Westpac Bank as the interim figures prepared for the year ended 30 June 2005 did not show any significant improvement in its operations. In July 2005, Paterson's Transport Group sold three trucks and two trailers to inject funds into the business in order to satisfy the debt to the Australian Taxation Office and other creditors. This has resulted in the business now being forced to restructure and terminate two long-term employees. Based on interim figures and my experience in the industry, the immediate future income of the business from livestock cartage looks bleak due to the break of the drought and farmers now holding onto their livestock to replace stock lost during the drought. The Paterson Transport Group is currently negotiating with the Westpac Bank to arrange debtor financing for the business to continue its operations. 16 Ms Kim Paterson was responsible for occupational health and safety within the defendant. She stated in her affidavit that prior to the accident in October 2002 all drivers were provided with a "Drivers' Manual". The Drivers' Manual outlined the company policies and rules, including a general occupational health and safety policy. A copy of the Drivers' Manual was brought to the attention of every new driver. Safe driving practices and legal requirements were specifically brought to the attention of drivers such as logbooks, weight of loads and protective gear. The driver was required to sign a Drivers' Manual Acknowledgement form confirming that they had received a copy of the Manual when they commenced their employment with the defendant. 17 Ms Paterson deposed: The issue of assisting GrainCorp employees when loading the truck with an auger at their depot had never arisen. We now accept that there is a broader requirement to issue instructions to our drivers not to give assistance to anyone on site and to ensure that our drivers comply with these instructions. 18 In November 2002 Ms Paterson explained that the defendant retained a consultant to review and develop a more comprehensive Occupational Health and Safety Management Plan for the business. This was released in May 2003. The new Occupational Health and Safety Policy includes the defendant's Risk Management Plan to cover safe working procedures for truck drivers. It specifically instructs drivers on the safe working procedures that must be followed to load a grain tipper. In particular, it instructs the drivers not to give assistance to anyone on site and if augers are used to load grain, drivers are not to give any assistance with the auger. If the drivers feel that the worksite is unsafe, they are instructed to advise the appropriate personnel at the worksite. 19 Ms Paterson stated that as an extension to the Occupational Health and Safety Management Plan, the defendant has introduced a new Site Safety Assessment form that is completed, usually by a Director when Paterson's Transport drivers attend a new workplace site. Once the form has been initially completed for the new site, a copy is placed in every driver's book in the truck so that they can review the site safety assessment form when attending the site and update it if necessary. 20 In April 2005 Ms Paterson attended a four-day WorkCover Occupational Health and Safety Workplace Consultation Course at the TAFE Riverina Institute, Griffith. As part of that course, she was involved in a half-day assessment of the defendant's workplace as part of the requirement of the course. 21 Ms Paterson stated that the new business premises at Red Hill Industrial Estate were designed to meet occupational health and safety legislative requirements and were purpose built to include an amenities room, toilets/shower, first aid room including a bed, office and storage area and a large work shed. The cost to the defendant in building the new premises to comply with the Occupational Health and Safety Act and Regulations, including purchase of the land was approximately $550,000.00. 22 Ms Paterson deposed that during the 53-year operation of the defendant company, it had never been prosecuted by WorkCover. 23 In his affidavit Mr Douglas Paterson deposed: Paterson's Transport drivers had carted grain from the GrainCorp Boree Creek depot prior to the accident but they had never loaded grain at the particular shed where the accident occurred. This shed had no fixed out loading facility to load the grain. Prior to or on the day of the accident, GrainCorp did not inform Paterson Transport that our trucks would be loaded by a portable auger instead of the usual automated fixed outlet spout. Prior to the accident, Paterson's Transport trucks had never been loaded at any GrainCorp site by a portable auger. Paterson's Transport also load grain from other sites owned by companies such as ABA (Australian Bulk Alliance) & AWB (Australian Wheat Board). Sites owned by these companies only have fixed out loading facilities to load grain. Augers are not utilised. GrainCorp had bought the shed where the accident occurred from another company. GrainCorp now also owns a similar shed located at Lockhart. These two sites use augers to load the trucks. I was not aware that GrainCorp used augers to load grain at Boree Creek or Lockhart until after the accident. During harvest time, augers are used on farms to load grain into trucks. I have never experienced an auger collapsing or overbalancing like it did at Boree Creek when it injured Danny Stone. Prior to the accident I had never seen a Workcover safety alert about the collapse of grain augers. Prior to the accident, Paterson's Transport did not address the issue of handling augers with our drivers. At the Boree Creek depot, our drivers decided to lend a hand to the Grain Corp employees to move the auger because they were having problems. We have now instructed our drivers not to help out in future. 24 Mr Paterson explained that the current procedures when a Paterson's Transport driver attends a GrainCorp site to load grain is as follows: · The truck is weighed at the entrance to the depot. The driver is given a weigh docket. · The driver is also handed a laminated leaflet from GrainCorp outlining safety procedures. · The driver must sign an acknowledgment that they have received and read the leaflet. The driver is given instructions where to drive the vehicle to load the grain. · The driver roles the tarp back on the tipper. · When the GrainCorp operator is ready, he tells the driver to drive the truck under the automated outlet spout or to a position if being loaded by an auger. · The driver then yells out to the operator to stop loading the grain when the truck is sufficiently full. The tarp is replaced. · The driver then drives out to the weigh station to check the weight of the load. · If the load is too heavy, the truck is directed back over a grate to drop some of the load. · The truck is then re-weighed at the entrance. · The driver hands back the laminated leaflet when he leaves the GrainCorp site. Consideration 25 Because the prosecution addressed in its submissions the approach the Court should take to sentencing, I should state the approach I have taken is the same as that explained in Inspector Yeung v Howie Herring & Forsyth Pty Limited & Anor [2005] NSWIRComm 266. 26 In its submissions going to the objective seriousness of the offence the prosecution referred to the defendant's failures in the following terms (references to evidence omitted): As at 16 October 2002: · GrainCorp's depot policy for visitors to its depots did not require visiting truck drivers to refrain from handling GrainCorp's grain loading equipment and/or to refrain from assisting GrainCorp's employees in the handling and/or movement of such equipment, including the mobile augurs [sic - an augur (noun) is a soothsayer, diviner, or prophet, generally; one that foretells the future] used from time to time to load grain into trucks at GrainCorp's depots, including the Boree Creek depot. ... · The defendant had not taken any steps to ensure that its employees were properly inducted with respect to their attendance at GrainCorp's sites, including a failure to ensure that its employees were aware that they were not to assist in the handling, movement and/or used of GrainCorp's equipment, including the mobile augurs used from time to time to load grain onto trucks at Graincorp's depots, including the depot at Boree Creek; and · The defendant did not provide any directions or instructions to its employees not to handle, move or use, or to assist in the handling, movement or use of Graincorp's equipment, including the mobile augurs, used from time to time, to load trucks at GrainCorp's depots, including the Boree Creek Depot. 27 The failures identified by the prosecution certainly provide a measure of the objective seriousness of the offence. However, it is also relevant to take into account the following matters: (1) The risk arose at Graincorp's site and involved Graincorp's equipment. The auger had no notice attached to it warning of its propensity to "up-end". (2) Graincorp did not provide a site induction to visiting truck drivers that included instructions regarding dangers associated with the instability of the mobile augers used from time to time to load grain into trucks at Graincorp's depots, including the Boree Creek depot. (3) There was no evidence the defendant was aware of the dangers of the auger toppling over. (4) The defendant's employees had not previously loaded trucks in the manner that occurred on 16 October 2002 and the defendant's drivers were not usually involved in the loading operation. (5) The assistance provided by the defendant's employees in attempting to move the auger was a spontaneous event and not a developed practice. 28 The existence of a reasonably foreseeable risk to safety that is likely to result in serious injury or death is a factor that will be relevant to the assessment of the gravity of the offence: Department of Mineral Resources of New South Wales (Chief Inspector Bruce Robert McKensey) v Kembla Coal and Coke Pty (1999) 92 IR 8 at 27. The standard of foreseeability is objective but it is not necessary that the precise causal circumstances of exposure to the risk and the consequent accident were reasonably foreseeable: Kembla Coal & Coke at 27. 29 The defendant was aware of the use of mobile augers to load trucks on farms but it was not aware that Graincorp would use a mobile auger at its Boree Creek depot. The defendant's expectation in sending the truck to Boree Creek was that it would be loaded in the usual way via an automated fixed outlet spout or by the use of a front-end loader. The defendant was not advised otherwise. That is a consideration to be taken into account in the defendant's favour. However, given the absolute duty imposed on an employer to ensure safety, the question is not so much whether the risk of an employee being struck by the mobile auger was reasonably foreseeable. Rather the question is whether it was reasonably foreseeable that in sending employees to remote sites there was a risk of injury or death from the employees becoming involved in handling machinery or equipment with which they were unfamiliar and in respect of which they had received no training or instruction in circumstances where they had not been instructed to refrain from handling such machinery or equipment. The ordinary jury person or reasonable observer would have to answer in the affirmative. 30 It would not have been difficult for the defendant to avoid the risk. An instruction to its employees that required them not to handle any customers' equipment and, in particular, equipment with which they were unfamiliar and in respect of which they had received no specific training or instruction from the defendant would have reduced or obviated the risk. I note that following the incident the defendant instructed its drivers not to involve themselves in the handling, movement and/or use of loading equipment located within its customers' depots. 31 The consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected: Rodney Morrison v Powercoal Pty Ltd (2003) 130 IR 364 at [32]. In this case, Mr Stone suffered serious injuries thereby reflecting the seriousness of the risk of exposing employees to the dangers involved in handling customers' equipment and machinery without adequate training or instruction. 32 There are proper grounds for including in any penalty an element for general deterrence. This case is an unfortunate illustration of the risks that employees may be subjected to if they handle machinery and equipment with which they are unfamiliar and in respect of which they have had no instruction or training. Whilst the ethos of lending a helping hand might generally be one to be encouraged that is not the case where it might involve placing employees at risk of injury or even death. 33 It is appropriate that I also include in the penalty an element for specific deterrence. In light of the measures taken after the incident in October 2002 to improve its occupational health and safety procedures and its otherwise very good record, I consider the risk of the defendant re-offending is small. However, as the Full Bench noted in Capral Aluminium Limited v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [77] it is unlikely that the weight to be attached to specific deterrence could be reduced to zero. Where the offender continues to be an employer, risk to safety or its employees or contractors may exist or be possible. It is appropriate to remind the defendant of the need to maintain constant diligence and take all practical precautions to ensure safety in the work place. 34 There are a number of relevant subjective considerations. Firstly, the defendant entered an early plea of guilty and any penalty should be reduced by 25 per cent for the utilitarian value of that early plea. Secondly, the defendant is also entitled to a discount with respect to its co-operation with the WorkCover Authority in its investigation of the subject incident. Thirdly, the defendant provided assistance to the injured worker. Fourthly, the defendant is entitled to the benefit of recognition of its good industrial citizenship exemplified by its good record over the past 53 years. 35 I have also had regard to the fact that the defendant is a relatively small family company, important to the local community and affected by the drought and rising fuel costs. 36 The benchmark against which I am required to measure a penalty in this case is the maximum penalty of $550,000. That is a very significant penalty but it reflects the seriousness with which the legislature views breaches of the occupational health and safety laws. 37 Having taken into account all of the relevant considerations it is impossible to view the defendant's breach as warranting a high penalty. Accordingly, I consider an appropriate penalty should be at the lower end of the penalty range. I fix a penalty of $55,000. Orders 38 The Court makes the following orders: 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 $55,000 with a moiety thereof to the prosecutor. 4) The defendant shall pay the prosecutor's cost of the proceedings in an amount as agreed or, if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs. 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.