Industrial Relations Commission of New South Wales in Court Session CITATION: WorkCover Authority of New South Wales (Inspector Nixon) v James Hardie Australia Pty Ltd [2006] NSWIRComm 326 PROSECUTOR WorkCover Authority of New South Wales (Inspector Rebecca Nixon) PARTIES: DEFENDANT James Hardie Australia Pty Ltd FILE NUMBER(S): IRC 5433 of 2005 CORAM: Marks J CATCHWORDS: OH&S – guilty plea – no evidence given by driver or injured person – no system implemented prior to incident that would have avoided or minimised risk of injury – mitigating factors – cooperation with prosecutor – expression of contrition and remorse – defendant had extensive OH&S training program prior to incident – prior record brought to courts attention by defendant. Held: Objectively serious, though not most serious case – penalty imposed. LEGISLATION CITED: Occupational Health and Safety Act 2000 HEARING DATES: 21/09/2006 DATE OF JUDGMENT: 10/23/2006 PROSECUTOR SOLICITOR: Mr J Rodney Carroll & O'Dea Lawyers LEGAL REPRESENTATIVES: DEFENDANT SOLICITOR: Mr C Dunn Corrs Chambers Westgarth Lawyers JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Marks J Monday, 23rd October 2006 Matter No IRC 5433 of 2005 Inspector Rebecca Nixon v James Hardie Australia Pty Ltd Prosecution under s 8(2) of the Occupational Health and Safety Act 2000 JUDGMENT [2006] NSWIRComm 326 1 The defendant James Hardie Australia Pty Ltd has pleaded guilty to a prosecution brought by Inspector Rebecca Nixon of the Workcover Authority of New South Wales to a breach of s 8(2) of the Occupational Health and Safety Act 2000 ("the Act"). The charge, which is constituted by an amended application for order, is that the defendant being an employer on 27 October 2003 at 10 Colquhoun Street, Rose Hill ("the premises") in the State of New South Wales, " DID FAIL , contrary to Section 8(2) of the 2000 Act to ensure that people (other than the employees of the Defendant employer), and in particular Mr Ernesto Martinelli, are not exposed to risk to their health or safety arising from the conduct of the Defendant employer's undertaking while they are at the Defendant employer's place of work. Date of Offence : 27 October 2003 The particulars of the charge are as follows The Defendant failed to provide or maintain a system of work for the loading of trucks in the warehouse loading bay area that was safe and without risk to health. In particular the Defendant: 1. failed to prevent truck drivers from standing along side forklift trucks when providing forklift drivers with instructions on where to load manufactured products onto the truck. 2. failed to provide any physical barrier or designated safety area to protect persons including truck drivers at the warehouse loading bay area whilst the forklift was in operation. 3. failed to provide or maintain sufficient warning by means of signage to prevent access to the warehouse loading bay area whilst the forklift was in operation." 2 This judgment considers only the question of penalty. 3 There was tendered into evidence an agreed statement of facts, which is in the following terms: "1. At all material times the Prosecutor was: (a) an Inspector duly appointed under Division 4 of Part 3 of the Occupational Health and Safety Act 1983 (NSW) ("the 1983 Act"); (b) taken to be appointed as an Inspector under the Occupational Health and Safety Act 2000 ("the 2000 Act") by virtue of Clause 11 of Schedule 3 to the 2000 Act; and (c) empowered under s.106 of the 2000 Act, as extended by Clause 13 of Schedule 3 to that Act to institute proceedings in the within matter. 2. At all material times James Hardie Australia Pty Limited (ACN 084 635 558) ("the Defendant") was a company duly incorporated with a registered office located at Level 3, 18-22 Pitt Street, Sydney in the State of New South Wales. 3. At all material times the Defendant was an employer in the State of New South Wales. 4. At all material times the Defendant undertook the manufacture, warehousing and distribution of its products including fibre cement and building products ("the undertaking") from 10 Colquhoun Street, Rosehill, 2142 in the State of New South Wales ("the premises"). 5. At the premises there was a warehouse which measured approximately 148m long x 96m wide. Located within the warehouse area were a manufacturing area, dispatch area and amenities. Attached to the front of the warehouse was a loading bay area. The warehouse loading bay area measured approximately 20m long x 96m wide. The warehouse loading bay area comprised eight (8) individual bays each numbered and measuring approximately 11 m length x 5m width. Each loading bay was distinguished by single yellow lines painted on the ground. 6. At all material times the Defendant owned and operated an eight tonne Linde model H70D forklift, serial number 353F11003170, plant identification number 96 ("the forklift") at the premises. 7. At all material times the Defendant employed William Tova as a forklift driver at the premises. Mr Tova's duties included loading trucks, moving stock and making out orders. 8. On about 27 October 2002 the Defendant contracted with E M Transport Pty Limited ("E M Transport") to provide transport and delivery services ("the work"). The Principal of E M Transport Mr Ernesto Martinelli ("the injured person") was an owner driver of an eight tonne table top truck which was used for the work. The terms and conditions of the contract, which were oral, required Mr Martinelli to attend on requested days, between Monday and Friday at the Defendant's premises at about 6:00am. Mr Martinelli would receive paperwork concerning the deliveries. Thereafter Mr Martinelli would return to his truck in the warehouse loading bay area and await the arrival of the forklift driver to collect the paperwork and load the truck. The terms of the contract required Mr Martinelli to assist the forklift driver to load the truck which meant that Mr Martinelli was always in and about the warehouse loading bay area whilst the forklift was in operation. 9. On most days Mr Martinelli would undertake several deliveries. Mr Martinelli would invoice the Defendant weekly and payment for the work was made by electronic funds transfer to E M Transport. 10. At about 6.00am on 27 October 2003 (the day of the incident) Mr Martinelli arrived at the Defendant's premises and parked his truck in number one (1) bay of the warehouse loading bay area for the purposes of loading pallets of goods for delivery. Mr Tova commenced loading the pallets onto Mr Martinelli's truck using the forklift. As the pallets were being loaded Mr Martinelli remained in the number one (1) bay nearby the truck to assist Mr Tova with the loading and tying wooden gluts to secure the pallets to prevent them from moving. Mr Martinelli discussed with Mr Tova the number of pallets to be loaded and their position on the truck. 11. A number of pallets were loaded without incident. At approximately 11:15am after loading the second last pallet Mr Tova drove the forklift towards the dispatch storage shed to pick up the last pallet, which was a makeup pallet, and realised he did not have the paperwork. Mr Tova reversed the forklift towards Mr Martinelli's truck and stopped just short of the tray with the back wheels of the forklift at about 45 angle to Mr Martinelli's truck. 12. Mr Martinelli gave Mr Tova the paperwork and as Mr Martinelli turned to walk away Mr Tova drove the forklift forward and the rear of the forklift turned in Mr Martinelli's direction knocking him to the ground and the forklift ran over his right lower leg and foot. 13. In the subject incident Mr Martinelli suffered serious injuries to his right leg and foot. Mr Martinelli was rushed to Westmead Hospital by ambulance where subsequently his right leg was amputated below the knee. 14. The Defendant had no signage at the warehouse alerting persons to the operation of forklift or to indicate that persons were not to proceed beyond safe points in the warehouse loading bay area. 15. It was common practice for Mr Martinelli and other truck drivers to access the warehouse loading bay area to assist the forklift driver during loading operations. The Defendant had no procedures in place to prevent people accessing the warehouse loading bay area during forklift loading operations. 16. The Defendant had forklift loading procedures in place at the time of the incident which required forklift drivers to scan the warehouse and loading docks for people and vehicles. The forklift loading procedures did not address persons accessing the warehouse loading bay area and did not specifically warn persons to remain clear of the forklift whilst it was in operation, in circumstances where the Defendant was aware that it was common practice for persons to access the warehouse loading bay area to assist the forklift driver during loading operations. 17. The Defendant had no physical barrier to prevent people accessing the warehouse loading bay area during forklift loading operations. 18. To prevent a reoccurrence of the subject incident the Defendant has introduced the two (2) metre rule that states that pedestrians cannot go within two (2) metres of an operating forklift. Forklift drivers have been instructed to turn their engines off if a person comes within two (2) metres of the forklift during its operation. 19. Additionally the Defendant also requires truck drivers on each occasion they attend the premises to remain at their truck and be given documented instructions at the gatehouse. Boxes one (1) metre wide have been painted on the ground of the warehouse loading bay area and designate the loading position and safe areas for truck drivers to be stationed during loading operations. The Defendant also undertook a risk assessment on the warehouse loading bay operations. 20. The Defendant had conducted risk assessments in 1996 and 1997 in the warehouse loading bay area. The risk analysis in 1996 revealed that traffic movement and forklift operations was categorised as a high level of risk without controls in place. It was deemed that the existing controls of training and experience dropped the level of risk to a low level. It was then accepted that training and experience were deemed adequate. 21. Mr Martinelli was aware of the Defendant's forklift procedures however those procedures failed to identify the risks associated with people working in and around the forklift during truck loading bay operations. Those procedures did not provide a designated safety area for truck drivers to remain during such loading operations. 22. The risk assessment conducted in December 2002 revealed that there had been conformance to the Defendant's requirements for persons to wear high visibility vests and safety glasses. The high visibility vests were one of the control strategies used to ensure the safety of persons in the warehouse loading bay area. Mr Martinelli was wearing a high visibility vest at the time of the incident. 23. The Defendant assisted and co-operated with Inspector Nixon during the course of her investigation. THE CHARGE 24. It is alleged that James Hardie Australia Pty Limited (ACN 084 635 558) the Defendant being an employer on 27 October 2003 at 10 Colquhoun Street, Rosehill in the State of New South Wales did fail contrary to section 8(2) of the 2000 Act to ensure that people (other than employees of the Defendant employer and in particular Mr Ernesto Martinelli) were not exposed to risk to their health or safety arising from the conduct of the Defendant employer's undertaking while they are at the Defendant employer's place of work. PARTICULARS OF CHARGE: 25. The Defendant failed to provide or maintain a system of work for the loading of trucks in the warehouse loading bay area that was safe and without risk to health. In particular the Defendant (a) failed to prevent truck drivers from standing along side forklift trucks when providing forklift drivers with instructions on where to load manufactured products onto the truck. (b) failed to provide any physical barrier or designated safety area to protect persons including truck drivers at the warehouse loading bay area whilst the forklift was in operation. (c) failed to provide or maintain sufficient warning by means of signage to prevent access to the warehouse loading bay area whilst the forklift was in operation." 4 For the prosecution there was also tendered into evidence a series of photographs, a factual inspector's report and some material comprising the defendant's documents referable to its system of work prior to the incident, its investigation of the incident and an amended system of work introduced after the incident. 5 The defendant tendered into evidence affidavits of Stephen James, its Environmental Health and Safety Manager. 6 The starting point for the assessment of an appropriate penalty is a consideration of the objective seriousness of the offence. There was no evidence given by either the driver of the forklift vehicle or the truck driver who was injured. However, it is plain from the evidence that was tendered in the proceedings that the defendant, even though it had directed its attention to health and safety matters affecting the loading and unloading of trucks by the use of forklifts, had not implemented a system that would have avoided or minimised the risk of injury being sustained by a truck driver. In essence, the defendant's system did not preclude the truck driver from being close to the forklift while it was being operated. 7 I accept the submissions made on behalf of the defendant that it did have in operation an extensive occupational health and safety program prior to the incident and that that program was directed to that part of the company's operations where this incident occurred. The company concentrated its activities on training. There is evidence that the forklift driver involved in this incident was given extensive training over a long period of time. The company had hoped that the nature and extent of the training would have avoided an incident of this kind occurring. 8 As will be seen from the statement of agreed facts, the company has now put in place measures designed to ensure that persons including truck drivers stand well clear of the place of operation of a forklift. Furthermore, forklift drivers are required to switch off their machines when a person comes within a two-metre distance. 9 Objectively, I would assess the offence as being serious, although not of the most serious category. However, given the inherent risk of injury that accompanies any circumstances where persons are placed in close vicinity of moving vehicles, the extent of seriousness is greater than a low level. I will approach the assessment of an appropriate penalty on this basis. 10 In assessing penalty, I shall also take into account the deterrent effect of the imposition of a penalty in a general sense as well as the deterrent effect on this defendant. 11 There are a number of matters that must be taken into account by way of mitigation. The defendant pleaded guilty at the earliest possible opportunity. There was evidence that the defendant has an extensive occupational health and safety program and a commitment to the discharge of its obligations under the Act. The evidence extends not only to systems of work but also to the training of employees, the identification of risks and their eradication and the like. Furthermore, the defendant has expressed contrition for what has occurred. It cooperated fully with the prosecutor in the investigation of the incident. There was evidence of the commitment of the defendant to certain charitable organisations and to the welfare of its employees. 12 Information available to the prosecutor was that the defendant had no prior convictions. On this basis the maximum penalty was $550,000. However, the defendant volunteered that many years ago it had been convicted by an industrial magistrate and had paid a small fine and, more recently, had been fined by a judge of this Court in a prosecution brought on behalf of an industrial union of employees. The defendant is to be commended for having drawn these matters to the attention of the Court so that the assessment of penalty may be made by reference to the appropriate maximum penalty, a fine of $825,000. 13 Having regard to all of the matters to which I have referred, and in particular to the mitigating circumstances that I have summarised, I am of the opinion that the appropriate penalty is in the sum of $100,000. 14 The prosecutor sought a moiety of the penalty and the payment of costs, which were not opposed. Orders 15 I make the following orders: 1) The defendant is found guilty of the offence charged and convicted accordingly. 2) The defendant is fined the sum of $100,000, with a moiety to the prosecutor. 3) The defendant is to pay the costs of the prosecutor agreed in the sum of $11,000. 4) Liberty to apply with respect to costs which must be exercised within two months of this date. 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