Industrial Court of New South Wales CITATION: Bastian v Medicraft Hil-Rom Australia Pty Ltd [2010] NSWIRComm 34 PARTIES: Paul Anthony Bastian (Prosecutor) Medicraft Hil-Rom Australia Pty Ltd (Defendant) FILE NUMBER(S): IRC 1236 of 2009 CORAM: Marks J CATCHWORDS: OCCUPATIONAL HEALTH AND SAFETY - breach of s 8(1) of the Occupational Health and Safety Act 2000 - early guilty plea - appropriate penalty - objective seriousness - inadequate safety procedures -general and specific deterrence - mitigating subjective factors - remorse and contrition - no prior convictions - appropriate to grant a moiety of a penalty where prosecution is brought by a person holding office with industrial organisation - penalty imposed LEGISLATION CITED: Occupational Health and Safety Act 2000 - s 8(1), s 106(1)(d) CASES CITED: Derrick v ANZ Group Limited (No 2) [2005] NSWIRComm 145 HEARING DATES: 12 February 2010 26 February 2010 (written submissions) DATE OF JUDGMENT: 19 March 2010 Mr A Slevin of counsel (Prosecutor) Solicitors Turner Freeman LEGAL REPRESENTATIVES: Mr A Gotting of counsel (Defendant) Solicitors Johnson Winter and Slattery JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Marks J Friday 19 March 2010 Matter No IRC 1236 of 2009 Paul Anthony Bastian v Medicraft Hil-Rom Australia Pty Ltd Prosecution under s 8(1) of the Occupational Health and Safety Act 2000 JUDGMENT ON PENALTY [2010] NSWIRComm 34 1 The defendant, Medicraft Hil-Rom Australia Pty Ltd, has been charged by the prosecutor, Paul Bastian, secretary of the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch, with a breach of s 8(1) of the Occupational Health and Safety Act 2000 ("the Act"). The prosecution is brought by Mr Bastian pursuant to s 106(1)(d) of the Act. The defendant has pleaded guilty to the offence with which it is charged and this judgment deals with the question of penalty only. 2 An agreed statement of facts was tendered into evidence. It is reproduced hereunder, save that the annexures that are referred to are not reproduced. 1 At all material times, Medicraft Hill-Rom Australia Pty Limited (ACN 101 410 940) ( Defendant ) was and is a corporation with its registered office at 72 – 84 Shepherd Street, Marrickville in the State of New South Wales ( Premises ). 2 At all material times, the Defendant was and is a manufacturer and supplier of advanced hospital equipment and technology. 3 On 11 February 2008, the Defendant employed Mr Peter Solvyns as a Fabricator in the Press Shop at the Premises. 4 On 11 February 2008, the Defendant operated a number of press machines in the Press Shop at the Premises. These press machines were used for several purposes, including the fabrication of metal components to be used in the assembly of hospital beds for sale by the Defendant. 5 On 11 February 2008, Mr Solvyns' duties included the pressing, bonding and cutting of metal into various shapes and sizes as well as the patching of holes using the presses. 6 On 11 February 2008, Mr Solvyns operated the riveting tool on the John Heine 202A Series 3 press machine ( Press No. 3 ) at the Premises. Mr Solvyns had not operated the riveting tool on Press No.3 before. 7 On 11 February 2008, Press No. 3 had two separate guards. The first guard was a fixed guard which was attached to the various tools which were used when operating Press No. 3. The second guard was a movable guard which was attached to Press No. 3 itself. 8 When operating Press No. 3 with the riveting tool, the operator (such as Mr Solvyns) was required to feed a 400mm long steel tube into Press No. 3 and then engage Press No. 3 by placing his or her foot on a pedal so that Press No. 3 dropped a cutting device which placed a flared hole in the steel tube. During this operation with the riveting tool, it was not physically possible for the movable guard on Press No. 3 to be in its proper position in addition to the fixed guard on the riveting tool because the movable guard prevented the operator from feeding the steel tube into Press No. 3. As a result of this, the movable guard on Press No. 3 was removed whilst the riveting tool was being used. 9 Prior to 11 February 2008, the Defendant commissioned a risk assessment to be carried out by Ms Marcia Lusted, OHS Consultant, and received a report prepared by Ms Lusted dated 7 November 2006 ( Report ). The Report stated in relation to the operation of the presses that there was a 'potential incident/accident' of 'crush injury to fingers and hands due to ineffective guarding' . The Report assessed that the probability of the risk was 1 and the consequence of the risk was 1, with the rankings to be understood in light of the Hazpak guide to risk management issued by the WorkCover Authority of New South Wales ( WorkCover ). The Report recommended 'Guards need reviewing' . A copy of an extract of the Report is annexed and marked ' A '. 10 Before Mr Solvyns commenced operating Press No. 3 with the riveting tool for his first time, Mr Alex Carrera, the Defendant's Team Leader in the Press Shop, provided Mr Solvyns with a practical step-by-step demonstration of how to use the riveting tool on Press No. 3. As part of this demonstration, Mr Carrera informed Mr Solvyns that care should be taken to ensure that he did not try to put his hand into Press No. 3 when operating the riveting tool. Mr Carrera observed Mr Solvyns operating the riveting tool on Press No. 3 three or four times before Mr Carrera went to attend to other duties. Prior to the incident referred to in paragraph 12 below, Mr Carrera monitored Mr Solvyns' operation of the riveting tool on Press No. 3 on three further occasions. 11 The Defendant at the time of the incident referred to in paragraph 12 below did not have a written safe work method statement for using Press No. 3 with the riveting tool. 12 After approximately thirty (30) minutes of operation of Press No. 3 by Mr Solvyns, the riveting tool on Press No. 3 became jammed in the steel tube. Mr Solvyns attempted to remove the jam placing his hand into the work area of Press No. 3 in an attempt to jiggle the bit of steel tubing free. At the same time the piece of steel tubing came free allowing Press No. 3 to engage causing a crush injury to the tip of Mr Solvyns' right middle finger resulting in its partial amputation ( Incident ). 13 Mr Carrera had not told Mr Solvyns what to do should the piece of material he was working on become jammed and how or if he should go about freeing the material. 14 After the Incident occurred, the Defendant took Mr Solvyns to hospital. 15 On 19 February 2008 an Inspector from WorkCover inspected Press No. 3. On 20 February 2008 the WorkCover Inspector issued a Prohibition Notice (149887) under s93 of the Occupational Health and Safety Act 2000 ( Act ). The Prohibition Notice required the defendant inter alia to cease the use of the riveting tool on Press No. 3 until it was securely guarded. 16 On 23 February 2008, the Defendant arranged for a risk assessment of the operation of the riveting tool on Press No 3 to be conducted. A copy of the risk assessment is annexed and marked ' B '. In order to eliminate the risks, the Defendant took the following steps: (a) on or around 29 February 2008, the Defendant modified Press No. 3 so that: (i) a narrow passage was created in the movable guard through which an operator could feed the steel tube into Press No. 3 allowing the movable guard to be in its proper place when operating the riveting tool; (ii) Press No. 3 could only be operated when the movable guard was in its proper place; and (iii) an extra guard was installed to block a gap at the top of the fixed guard on the riveting tool; and (b) on 3 March 2008, the Defendant issued a work instruction for the safe set-up and operation of press machines ( Work Instruction ). A copy the New Work Instruction is annexed and marked ' C '. 17 On 4 March 2008, an Inspector from WorkCover inspected the modifications made by the Defendant to the guarding on Press No. 3 and was satisfied that Press No. 3 was in satisfactory order and lifted the Prohibition Notice (149887). 18 The Defendant has entered a plea of guilty to an offence for breach of section 8(1) of the Act in that it failed to ensure the health, safety and welfare at work of Mr Solvyns. In particular: (a) The Defendant failed to ensure that plant, namely Press No. 3 when it was operated with the riveting tool, was safe and without risks to the health and safety of Mr Solvyns when properly used. (b) The Defendant failed to ensure that the system of work and the working environment of Mr Solvyns when operating Press No. 3 with the riveting tool was safe and without risks to health. (c) The Defendant failed to provide such information, instruction, training and supervision as was necessary to ensure Mr Solvyns' health and safety whilst operating Press No. 3 with the riveting tool. 19 The Defendant's failures at 18(a) 18(b) and 18(c) put Mr Solvyns at risk of physical injury. 20 Mr Solvyns suffered a crush injury and partial amputation of the tip of his right middle finger. 21 The Defendant has entered a plea of guilty at the first opportunity. 22 The Defendant has co-operated with and assisted the Prosecutor in its investigation of the offence. 23 The Defendant has no prior convictions for breach of the Act. 24 The Defendant endeavoured to notify WorkCover of the Incident but was advised by an employee of WorkCover that it was not necessary to so notify. 3 In addition, there was tendered into evidence a prosecutor's bundle of documents which included photographs, a copy of a prohibition notice referred to in the agreed statement of facts, a WorkCover pamphlet, also referred to in the agreed statement of facts, and a discharge referral from Royal Prince Alfred Hospital relating to the injured employee. On behalf of the defendant, there was tendered into evidence an affidavit of Alexander Peter Tyree, the manufacturing and supply chain manager of the defendant, which described the defendant's business and manufacturing operations, the defendant's conduct following the incident, the assistance rendered by it to the injured employee, steps taken by it to remedy the deficiency in the guarding attached to the particular machine and its commitment to its occupational health and safety obligations in a general sense. Furthermore, Mr Tyree's affidavit refers to certain activities undertaken by the defendant in support of its characterisation as being "a good corporate citizen". 4 The commencement point for the fixing of an appropriate penalty is an assessment of the objective seriousness of the offence. There can be no doubt from the agreed statement of facts that as at November 2006, the defendant was aware of the potential for injury from the risk assessment report, which is referred to in [9] of the agreed statement of facts. On the basis of such evidence as is before the Court, no steps were taken by the defendant to remedy this deficiency. This is, of course, a serious matter. On the other hand, I take into account that this was not the case of a machine that had no guarding at all. There were, as described in [7] of the agreed statement of facts, two guards which had been affixed. They were, however, inadequate as is demonstrated by the modifications that were carried out after the incident and that are described in [16] of the agreed statement of facts. 5 It is, in my opinion, a serious matter to require employees to operate machinery that is inadequately guarded. However, this is far from a worst case scenario having regard to the presence of some guarding on the machine, albeit inadequate, and in the context of the defendant's overall commitment to occupational health and safety matters as is referred to in the evidence of Mr Tyree. 6 In assessing penalty, I shall also take into account the specific deterrent effect that such a penalty will have on this defendant, which continues in business as a significant manufacturer and supplier of advanced hospital equipment and technology, and specifically hospital beds. To some extent, however, the specific deterrent effect on this defendant may be ameliorated by reason of its commitment to discharging its obligations under the Act as is demonstrated by the comprehensive steps taken by the defendant after the incident. 7 It is also necessary to have regard to the general deterrent effect that the imposition of a penalty will have within the industrial community generally, and I shall do so. 8 There are mitigating subjective matters that the Court is entitled to take into account in favour of the defendant. On the evidence before the Court, it entered a plea of guilty at the earliest appropriate opportunity, it co-operated fully with the prosecutor and the WorkCover Authority of New South Wales in connection with its investigation, it has expressed remorse and contrition for the incident and the injuries sustained by its employee and has assisted its employee in a tangible manner. Despite operating over many years, the defendant has no prior convictions for any offence against the Act or associated legislation. There is evidence that establishes that the defendant is a "good corporate citizen". 9 The defendant having no prior convictions, the maximum penalty is the sum of $550,000. Having regard to all of the matters to which I have referred, I intend imposing a penalty of $95,000. 10 The prosecutor sought an order for costs, which was not opposed and which I intend granting. The prosecutor also sought a moiety of the penalty, being payment of one half thereof 11 The defendant did not oppose the making of an order for the payment of a moiety of the penalty to the prosecutor. I raised with the parties the appropriateness of the Court making such an order having regard to the fact that the prosecutor was an individual, albeit the secretary of a registered organisation of employees. Subsequently, with leave, the Court received an affidavit sworn by the prosecutor on 25 February 2010. That affidavit referred to the activities of the Australian Manufacturing Workers' Union (AMWU), New South Wales State Office with particular reference to the activities of an occupational health and safety unit. That unit was said to conduct training as an accredited WorkCover trainer, to conduct safety inspections at workplaces where members of the union worked, to have involvement in representative activities with employers and government bodies concerning occupational health and safety matters and to communicate generally with union members. The prosecutor undertook to pay any moiety of the penalty to the AMWU and further undertook, on behalf of that organisation, that those funds "will be used by the AMWU solely for occupational health and safety related purposes." 12 The appropriateness of ordering the payment of a moiety of a penalty imposed for breach of the Act and its predecessor in circumstances where the prosecution is brought by a person holding office with an industrial organisation of employees has been the subject of many decisions of this Court and its predecessor. A number of them are conveniently referred to in the judgment of Boland J (as his Honour then was) in Derrick v ANZ Group Limited (No 2) [2005] NSWIRComm 145. Subsequently, the researches of counsel for the prosecutor have indicated that there are a further ten decisions of this Court in which moieties have been granted in circumstances similar to those which prevail in these proceedings. 13 I am satisfied on the authorities that there is a general practice in this Court to order the payment of a moiety of a penalty where the Court is satisfied that the monies so paid will be utilised by a registered organisation of employees for the purpose of promoting activities designed to enhance awareness of and compliance with occupational health and safety legislation. I am also satisfied, for the reasons canvassed by Boland J in Derrick based as they were on a consideration of other relevant decisions of this Court and its predecessor, that the relevant statutory framework exists to enable the making of such an order. Accordingly, I propose to do so in these proceedings having regard to the undertaking proffered to the Court by the prosecutor. Orders 14 I make the following orders: 1. The defendant is found guilty of the offence with which it is charged and convicted accordingly. 2. I impose a monetary penalty of $95,000 on the defendant with a moiety thereof to the prosecutor. 3. The defendant is to pay the costs of the prosecutor assessed by the Court in default of agreement. 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.