Industrial Court of New South Wales CITATION: Inspector Christensen v Ravey Pty Ltd [2007] NSWIRComm 109 PROSECUTOR Inspector Madeline Christensen PARTIES: DEFENDANT Ravey Pty Ltd FILE NUMBER(S): IRC 2335 of 2006 CORAM: Staff J CATCHWORDS: Occupational health and safety - Prosecution under s 8(1) of the Occupational Health & Safety Act 2000 - Rural industry - Thoroughbred horse stud - Explosion - Employee injured using oxyacetylene equipment to cut open a steel drum - Principles - Simple and straightforward steps available to avoid risk - Foreseeability - Culpability - General and specific deterrence - Good industrial citizenship - Importance of assistance provided by defendant to injured worker including welfare, rehabilitation and continuing employment - Late plea of guilty - Offence proven - Penalty imposed. LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 Occupational Health & Safety Act 2000 Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 Corinthian Industries (Sydney) Pty Limited v WorkCover Authority of New South Wales (Inspector Wilson) (2000) 99 IR 159 Inspector Chris Chadwick v B H MacLachlan (NSW) Pty Ltd [2004] NSWIRComm 331 Inspector Woodington v Thiess Services Pty Ltd [2004] NSWIRComm 20 Lawrenson Diecasing Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Morrison v Coal Operations Australia Ltd (No 2) (2005) 141 IR 465 CASES CITED: Morrison v Powercoal Pty Ltd (2003) 130 IR 364 R v Thomson; R v Houlton (2000) 49 NSWLR 383 WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited (2000) 95 IR 383 WorkCover Authority of NSW (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80 WorkCover Authority (NSW) (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd (2001) 105 IR 81 WorkCover Authority of NSW (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 WorkCover v TRW [2001] NSWIRComm 52 HEARING DATES: 27 April 2007 DATE OF JUDGMENT: 15 May 2007 PROSECUTOR Mr R Reitano of counsel Solicitor: Ms F Miller WorkCover Authority of New South Wales LEGAL REPRESENTATIVES: DEFENDANT Mr BD Hodgkinson SC with Mr C Magee of counsel Solicitor: Mr C Brown Brown Wright Stein Lawyers JUDGMENT: - 1 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: STAFF J 15 May 2007 Matter No IRC 2335 of 2006 INSPECTOR MADELINE CHRISTENSEN v RAVEY PTY LTD Prosecution under s 8(1) of the Occupational Health & Safety Act 2000 JUDGMENT [2007] NSWIRComm 109 1 Ravey Pty Ltd ("the defendant") undertakes the business of supplying labour to a thoroughbred horse stud known as Baramul Stud, which is located in the Widden Valley in the State of New South Wales ("the Stud"). It employs between 20 to 35 employees, at any one time, in various roles in the Stud's operation. 2 On 9 July 2004 at approximately 6.55 am, Mr Richard Moore was using an oxyacetylene set to cut open a steel drum, when the drum exploded. The explosion was as a result of the ignition of flammable substances that were inside the drum when Mr Moore applied heat to it. At the time of the explosion, Mr Moore was wearing protective eye goggles. 3 As a result of the explosion, Mr Moore sustained burns to 72 per cent of his body requiring him to wear a full body compression suit for two years. He also suffered calcification in his knees and elbow and he had a tracheotomy, which has affected his vocal cords. 4 The defendant was charged with an offence under s 8(1) of the Occupational Health & Safety Act 2000 ("the Act"). That section relevantly 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 offence with which the defendant was charged was that on 9 July 2004 , as an employer at Baramul Stud, it failed to ensure the health, safety and welfare at work of all employees, and in particular, Richard Moore. The particulars of the charge are that the defendant: (a) Failed to provide and maintain a safe system of work for employees performing work with oxy and acetylene equipment for the purpose of cutting used steel drums; (b) Failed to provide adequate information, instruction, training and supervision to employees performing work with oxy and acetylene equipment for the purpose of cutting used steel drums; (c) Failed to conduct any or any adequate risk assessment in relation to work involving the use of oxy and acetylene equipment for the purpose of cutting used steel drums; (d) Failed to ensure that steel drums stored at its place of work did not contain combustible material or vapours; (e) As a result of the said failures Richard Moore was placed at risk of injury. 6 The defendant pleaded guilty to the charge. 7 Mr R Reitano of counsel, who appeared for the prosecutor tendered an agreed statement of facts. The statement had annexed to it eight colour photographs showing the steel drum and the oxyacetylene set, a factual inspection report by Inspector Madeline Christensen dated 22 September 2004 and the defendant's prior record of convictions, which showed no convictions. 8 The agreed statement of facts (excluding formal parts) provided the following information: 4. At all material times the defendant was an employer and its employees worked at Baramul Stud, located in the Widden Valley in the State of New South Wales ("the Stud"). 5. At all material times the defendant employed Mr Richard Moore as Assistant Farm manager at the Stud. Mr Moore commenced employment with the defendant in December 2003. Mr Moore's duties at the premises included carrying out work such as fencing, cattle work and general maintenance. Prior to December 2003, Mr Moore had been employed as a farm hand at the Stud by another company for approximately six months. Mr Moore was 40 years of age at the time of the incident referred to below. 6. At all material times the defendant also employed Paul Thompson as the General Manager of the Stud. Mr Thompson had been employed at Baramul Stud as the General Manager since 1999. The defendant also employed the employees referred to in paragraph 10 below. 7. In December 2003, Mr Moore, Mr Thompson and the employees referred to in paragraph 10 below, where enrolled in a 'Rural Skill - Certificate III - Agriculture' course, conducted through New England Institute of TAFE and were employed with the defendant under a traineeship arrangement. Mr Moore as part of that course undertook modules including 'Workplace OH&S', Transport, Handling and Storage of Chemicals', 'Chainsaws', Fencing', 'First Aid', 'Livestock transport' and 'Cattle management'. 8. On the 9 July 2004 at approximately 6:55am Mr Moore received burns to his body while he was working at the front of the workshop at the Stud. At the time Mr Moore was using an oxy acetylene set to cut open a steel drum when the drum exploded. The explosion was a result of the ignition of flammable substances that were inside the drum when Mr Moore applied heat to it. At the time of the explosion Mr Moore was wearing eye goggles. 9. As a result of the explosion Mr Moore sustained burns to 72% of his body requiring him to wear a full body compression suit for 2 years, he also suffered calcification in his knees and elbow and he had a tracheotomy, which has affected his vocal cords. 10. On the morning of the incident Mr Moore, Shaune Darcey, Station hand, Mathew Holstein, farm worker, Mark Eddy, Farmer/gardener and Peter Partridge, Farm Manager, were at the workshop discussing the day's work. Mr Moore noticed a lot of poly fittings in one of the bays and decided to use steel drums as storage containers for the fittings. It was common practise to cut up steel drums and to use the cut up steel drums for various purposes around the property. 11. There were two drums at the front of the shed. One with the two bungs in place. The second drum had the bungs removed. The drums were 205 litre capacity drums. One of the drums had words including the word "Caltex" written on it. Mr Moore moved the drum with the bungs in place, into position at the front of the workshop, and then moved the oxy-acetylene set over to the drum. The other employees present at the time were still discussing the day's work when Mr Moore proceeded to cut into the drum with the oxy torch. Mr Moore had burned a small hole in the drum when the drum exploded. The base of the drum was blown into the air and landed about 80 metres away as a result of the explosion. 12. At the time of the explosion Mr Partridge, who was the supervisor at the time, was standing in the general vicinity and was aware that Mr Moore was proposing to cut the drum but he did not know what the drum was going to be used for. At the time the explosion occurred Mr Partridge was walking to the shed to check another drum and was talking to Mr Eddy. Mr Partridge did not give Mr Moore any instruction in relation to the task he was doing or the system of work he should adopt in doing that task. 13. Before commencing to cut the drum with the oxy-acetylene set Mr Moore did not remove the bungs from the drum and flush the drum out so as to ensure that there was no fuel or fuel vapours inside the drum before he applied heat to the drum by way of the oxy-acetylene. He did nothing at all to make sure that there was nothing in the drum that would ignite and explode once heat was applied to the drum. 14. Labels on the drum and the Material Safety Data Sheet show that the drum's original contents were premium multigrade high performance diesel engine oil. The employees working on the day were aware the drums had originally contained this product. 15. Prior to the incident drums had been used to obtain and store petrol when it was obtained from outside the stud on an occasion when the stud's underground tank was empty. The fuel was then siphoned out of the drums and into the premise's underground tank. The drum that Mr Moore chose to cut into was a drum that had been used to collect unleaded petrol. 16. At the time of the incident the usual practice for storing empty drums at the Stud was to put them at the rear of the workshop. There was no system in place at the Stud to flush out empty steel drums to ensure that there was no combustible material or vapour left inside the drum. There was no system in place the stud to ensure drums were clearly labelled as to any dangerous goods which had been stored within them. There was no system in place to alert anyone that the drums might pose a risk to safety if heat was applied to them. 17. The dangerous goods stored at the Stud consisted of farm chemicals, drugs for the horses, 11000L of unleaded petrol, 500L of leaded petrol and 22000L of diesel stored in underground tanks. 18. Prior to the incident Mr Moore had not received any instruction, training or information in relation to the use of oxy acetylene sets, dangerous goods or the cutting open of steel drums from the defendant. He had received some prior training elsewhere but this did not include training in the risks associated with cutting open steel drums or a safe system for doing that task. Mr Moore had prior experience in cutting into steel drums. The task was something that had been done before by Mr Moore and by others. 19. Prior to the incident some of the defendant's employees had undertaken general occupational health and safety training. 20. Prior to the incident no risk assessment had been carried out in relation to the risks associated with cutting open or cutting up steel drums. Prior to the incident there was no system in place for the conducting of risk assessments prior to work being undertaken at the Stud. None of the employees had been trained in conducting risk assessments generally or risk assessments in relation to the cutting up of steel drums. 21. The Stud is approximately 55 minutes drive from the nearest hospital. At the time of the incident the defendant did not have in place a written emergency procedure. 22. Subsequent to the incident the defendant ceased to have staff cut open steel drums for use on the property. The defendant also implemented an emergency procedure and provided training to staff on the emergency procedure. ... 9 Mr BD Hodgkinson SC and Mr C Magee of counsel, who appeared for the defendant, tendered an affidavit of Mr Paul Thompson. Mr Thompson is the General Manager of the Stud. Mr Thompson set out his background, experience and how the Stud operated. He stated that both prior to the defendant employing persons at the Stud and subsequent to that, he has been conscious of the need to ensure the health and safety of its employees. He stated that new employees were given an induction into the operation of the Stud. Mr Thompson had introduced a policy that Section Managers were not to send an employee to do a task that they had done before on their own. Employees were not allowed to undertake any task until they had demonstrated that they were able to do the task safely. 10 The Managers of the different sections of the Stud had their own induction programs for new employees. Mr Peter Partridge, the Farm Manager to whom Mr Moore reported, had an induction program for new employees. 11 In 2002, Mr Thompson instituted monthly managers meetings. At these meetings, issues regarding safety were raised and discussed. An action plan was developed to deal with safety matters. Over time, a wide range of safety related matters were raised and discussed in these meetings, including topics such as the safe use of equipment, safe working with animals on the Stud, the use of protective clothing, sun awareness and the use of sunscreens and hats. 12 In or about June 2003, Mr Thompson and other Section Managers including Mr Partridge and some senior employees attended a two day "FarmSafe" course entitled "Managing Farm Safety". The course was primarily focused on occupational health and safety. It dealt with the following topics: (a) the law and occupational health and safety requirements in accordance with the law; (b) the need for people to be properly trained; (c) the responsibility of the employer for the employees' safety; (d) the responsibility of the employer for ensuring that there are safe systems of work implemented; (e) hazard identification; (f) workshop safety, heavy lifting equipment and dangerous chemicals. Exhibited to the affidavit were the Course materials and Course Workbook, together with the Certificate obtained by Mr Thompson who attended the course. 13 Following the attendance at the FarmSafe course, Mr Thompson met with managers and discussed the course content and arranged for others to give demonstrations of how to perform tasks safely on the Farm. Mr Thompson also arranged for employees to attend a chemical handling awareness course. This course, which was run by TAFE, was held on the Stud. 14 Mr Thompson stated that in or about December 2003, the defendant commenced to employ persons working on the Stud. The defendant determined that all employees should be enrolled in relevant courses to ensure that they had appropriate skills and training to perform the task which they were required to perform on the Stud, and in particular, to be able to perform those safely. 15 In about December 2003, all employees, including Mr Moore, were enrolled in a "Rural Traineeship Training Plan". The employees undertook the "Rural Skills - Certificate III - Agriculture Course" conducted through the New England Institute of TAFE. The course was of 12 months duration. As part of the course, training officers from TAFE visited the Farm at different intervals and assessed the competencies of employees on how they performed tasks. A copy of the documents relating to Mr Moore's course were exhibited to the affidavit. 16 Prior to Mr Moore's accident, there was a range of safety equipment available for use by employees. This included safety goggles, aprons, earmuffs, gloves, and other personal protective equipment. The Stud also arranged for compliance testing for electrical equipment on a regular basis. 17 In early 2004, prior to the accident involving Mr Moore, Mr Thompson commenced a review of the occupational health and safety system on the Stud. In May/June 2004 the Janoel Group, an accredited WorkCover Assessor, was retained to undertake an audit of the safety systems and develop an occupational health and safety management system manual for the Stud. A copy of the first draft and the current manual was exhibited to the affidavit. 18 Mr Thompson stated that Mr Moore commenced employment at the Stud in July 2003 as the Assistant Farm Manager. Mr Moore was involved in general farm and property maintenance duties, including fencing, spraying, maintenance and repairs of farm equipment and machinery. Mr Moore had extensive experience in working on farms and cattle stations for over 20 years and had a number of qualifications, including safe application and use of chemicals and occupational health and safety, as well as certification for a number of different types of plant and equipment. Mr Thompson was aware from discussions with Mr Partridge, relating to work allocation, that Mr Moore had experience in the use of oxyacetylene equipment. 19 Mr Thompson set out the developments that occurred in respect of occupational health and safety at the Stud after an investigation and review of safety following Mr Moore's accident. As part of the investigation that was undertaken, it was identified that there was a need for a series of steps to be taken to improve occupational health and safety on the Stud. This included: (a) the documenting and formalising of many of the pre-existing safe work methods; (b) the purchase of a range of safety related equipment including additional fire extinguishers and fire blankets; (c) the purchase of additional personal protection equipment and other safety equipment; (d) The implementation and formalisation of systems of consultation and implementation of occupational health and safety; (e) additional formal training for employees; (f) a range of new signage relating to safety and safety equipment being introduced; (g) obtaining a WorkCover Authority Licence to keep dangerous goods. 20 In October 2004, the Stud commenced to implement a new regime of occupational health and safety work procedures. These included: (a) a New Employee Induction Checklist; (b) a Crew Manager's Checklist which included details of: (i) who the occupational health and safety representative was; (ii) explaining critical rules in work area; (iii) the use of safety equipment; (iv) the location and use of fire extinguishers and emergency muster points; (v) the availability of the first aid officer and facilities. (c) a Terms and Conditions of employment document which required employees to agree to undergo any workplace or institution based training required in relation to the employee's employment; (d) a Health and Safety Induction Guideline booklet; (e) an Employee Site Induction booklet and an Emergency Contact List. 21 In the period October to December 2004, the defendant employed Mr Paul Bryant to produce a number of documents relating to occupational health and safety. These included: (a) OH&S Guidelines for employees and contractors; (b) a standard form for the preparation of "Standard Operating Procedures"; (c) Site Inspection checklist; (d) Risk Register; (e) Emergency Contact details; (f) Operational Procedure Audit form; Copies of these documents were exhibited to the affidavit. 22 In or about December 2004, the day-to-day responsibilities for the implementation, review and documentation of occupational health and safety on the Stud was allocated to the Operations Manager, Ms Amanda Wain as part of her role. Mr Thompson retained overall responsibility for occupational health and safety. 23 In February 2005, Mr Thompson, Ms Wain and other section managers and some senior employees, including Mr Moore, attended a WorkCover accredited course entitled "OHS Risk Management for Supervisors and Managers". Arising out of that training it was determined that there was a need to further develop the existing systems and documentation for safety on the Stud. 24 In April 2005, Ms Wain commenced a review of each of the work sites to monitor their safety compliance. Ms Wain completed an Occupational Health and Safety Review Checklist in respect of a number of workplaces on the Stud including: (i) the workshop; (ii) "Topside" (being stables on the Stud); (iii) the Office; (iv) Oakleigh and Bull Oaks (both being stables on the Stud); (v) the common room. Copies of these documents were exhibited to the affidavit. 25 In about March 2005, Mr Thompson introduced specific occupational health and safety meetings for the Occupational Health and Safety Committee. These meetings are held monthly. At the meetings, Managers review and discuss matters raised regarding safety from the various safety systems in place. This includes review and discussion of the outcomes of monthly "toolbox meetings" that are held by employees and also the "Manual Handling Risk Assessment" forms that are prepared by employees. Discussion takes place as to what action needs to be taken and what changes should be implemented. The meeting also reviews previous safety matters and checks that there has been a proper implementation of agreed changes. 26 Mr Thompson stated that the Operations Manager and other Managers, himself and Mr Moore attended a Senior First Aid course in July 2005. In August 2005, Ms Wain undertook a review of the existing Occupational Health and Safety Management System Manual. In late 2005 and early 2006, "standard operating procedures - competencies" were introduced. This involved an assessment of the competency of employees in a number of commonly undertaken tasks on the Stud. Employees were assessed both as to their ability to undertake the tasks efficiently and safely. Employees were also required to prepare draft Work Method Statements. 27 In about July 2006, the Stud retained the services of an independent expert in occupational health and safety, Mr Allen Harrison to audit the workplace, undertake occupational health and safety programs and the write occupational health and safety documents. Mr Harrison has approximately 20 years experience in occupational health and safety auditing and implementing safety management systems, particularly on horse studs. A copy of Mr Harrison's Curriculum Vitae was exhibited to the affidavit. Mr Harrison has been retained to attend the Stud on at least a once per month basis to monitor existing occupational health and safety compliance and to update and improve systems. A part of Mr Thompson's review of safety included reviewing the existing "Safe Work Method Statements". As part of the implementation of these "Work Method Statements" employees are required to read them. They are then required to demonstrate to their Supervisor or Manager that they can perform the task safely and efficiently in accordance with the safe work method. Unless and until an employee is certified as being competent they are not permitted to perform that task. 28 The Manager of each section is also required to perform a monthly "Manual handling risk assessment" on a different task around the Stud each month. The Manager is provided with a checklist and forms. Employees are required to perform the assessment and provide information to their Manager and discuss what action needs to be taken in respect of the risk assessment performed. Mr Harrison also undertakes practical training by observing employees on the Stud undertaking tasks. If he observes an employee undertaking a task in an incorrect or unsafe manner, he is authorised to speak to the employees and to discuss with them the work that they are doing and how to do the task safely. Mr Harrison also reviews the Minutes and Attendance Register in respect of "toolbox meetings" and ensures problems identified in those meetings have been subsequently rectified. 29 A number of other systems and documents have also been instituted to ensure safety. These include: (a) the implementation of a "first aid register". There are 12 first aid kits located at various areas on the Stud which are required to be provided to the Operations Manager on a monthly basis; (b) "safety statistics return" forms. This form details the number of employees working under a Manager, the hours worked, any work injuries and any accident reports. These forms have to be completed at the end of each month; (c) "incident report forms". If an employee is injured and needs treatment, this form must be completed. The form contains an investigation page which requires the Manager, within 24 hours of the employee being injured, to complete an investigation into the cause of the injury and note any remedial steps that need to be taken to prevent further injury; (d) "neglect of safety precautions/site instruction" forms. This form allows any employee if they observe an unsatisfactory condition or action to report that matter to their direct Manager who refers the form to the Operations Manager; (e) "hazard report" forms. If an employee becomes aware of a hazard, they are required to complete and copy the hazard report from and give it to their Supervisor; (f) "time sheet" forms. This form includes a requirement for all employees to sign on and off and set out where they are working. This has been implemented to ensure that the employees are undertaking safe working hours and so their Supervisors are aware of their location on the Stud. Copies of each of these forms were exhibited to the affidavit. 30 Mr Thompson stated that the Operations Manager is now responsible for undertaking an induction of new employees. New employees are provided with an "Induction Information for Farm Workers" document and a copy of the "Non Specific Rules/Guidelines" document. There has also been an ongoing commitment to training. 31 As a result of the investigation into the accident, a new system was instituted in respect to the use of and storage of drums on the Stud. Employees are prohibited from utilising drums to store or transport petrol or diesel or other chemicals. Further, employees are also prohibited from cutting used drums that are on the Stud. Notwithstanding the prohibition, a safe work method document was introduced for the cutting of drums, subsequent to Mr Moore's accident. In addition, a further safe work document was produced in respect of the use of oxyacetylene equipment. 32 Mr Thompson stated that extensive steps had been taken to assist Mr Moore in respect of his rehabilitation as a result of his accident. He and other employees visited him whilst he was in hospital. Mr Moore continued to be paid his full wage over and above any workers compensation payments. Mr Moore's partner, who is also employed at the Stud as the Brood Mare Manager, was given time off for approximately six months to care for Mr Moore. She was paid her full wage during this period. Mr Moore returned to work on the Stud in or about April 2005. He has been given a great deal of flexibility as to what work he is able to undertake. This includes the hours during which he wishes to perform work and what work he is capable of undertaking. Mr Moore primarily performs fence maintenance work and chemical spraying. As part of his rehabilitation and to ensure his safety the Stud requires that another employee work with him wherever this is practicable. Mr Moore and his partner were provided with improved accommodation on the Stud. Renovations were carried out to the accommodation including the insertion of safety rails and upgrading the air conditioning. 33 Whenever Mr Moore needed time off from work, he has been given that leave with pay and without any deduction from his holidays. His partner has been afforded the same treatment. 34 Mr Thompson stated that Mr Moore will be provided with ongoing employment at the Stud for as long as he wishes to remain in employment. He continues to be paid at the full rate of pay, notwithstanding that he continues to have some limitations in respect of the level of work he is able to perform. Consideration 35 Counsel for each party acknowledged that the primary consideration in proceedings relating to penalty under the Act is the objective seriousness of the offence, which involves an objective assessment of the nature and quality of the offence. Subjective factors play a subsidiary role in the determination of penalty: Lawrenson Diecasing Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464. 36 The Full Bench in Morrison v Coal Operations Australia Ltd (No 2) (2005) 141 IR 465 succinctly summarised the principles to be applied in determining sentence for an offence under the Act. Their Honours stated: [8] The overall approach to be followed in relation to the determination of sentence is to be found in the first instance within the statutory provisions of the Crimes (Sentencing Procedure) Act 1999 and in particular, in relation to these proceedings, ss 3A Purposes of Sentencing and 21A Aggravating, mitigating and other factors in sentencing. [9] In R v Way (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act referred to above are not to be construed as representing "a departure from settled principles of sentencing practice, or an abandonment of the discretion that is essential to any system calling for individualised justice". As was said at [59]: [I]t is clear that the legislative policy ... so far as that can be discerned from the legislation itself, was not to create a straight jacket for judges ... but rather [was] intended to provide 'further guidance and structure to judicial discretion.' [10] The starting point for consideration as to penalty is the objective seriousness of the offence. That is a well established sentencing principle and was conclusively affirmed in the Full Bench decision in Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 at 474 as follows: [I]t 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" ... [11] The principle of foreseeability as a factor in determining the objective seriousness of an offence as part of the sentencing process was considered in the Full Bench decision in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at 646; 99 IR 29 at 62 as follows: The question of foreseeability is relevant to the assessment of the seriousness of the offence. We consider that the appropriate approach is that of Walton J, Vice President, in Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27: Whilst the reasonable foreseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432), the degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence. [12] On the issue of foreseeability, the Full Bench in Capral also stated at 646; 62 - 63: The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd (at 209 - 210) in these terms: ... reliance on "hindsight" must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy. So much is clear from the structure and language of the section which is premised on the requirement to "ensure ... health, safety and welfare at work" and the decided cases which make plain the nature of the obligation. [13] It is also necessary to consider the damage and injury suffered in the context of the evidence and "in light of the principles which have been laid down in relation to the relationship between the seriousness of injuries which have been suffered, or which may have been suffered, and the gravity of the offence" ( Capral at 650; 66). On that point the Full Bench in Capral stated: We consider that the relevant principle can be stated in this way. 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 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: Tyler v Sydney Electricity (1993) 47 IR 1 at 5, Inspector Hannah v Wonar Pty Ltd (1992) 34 AILR 377 at 378, Watson v Southern Asphalters Pty Ltd (1996) 83 IR 446 at 456, Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131, WorkCover Authority of New South Wales v Albury City Council (1999) 90 IR 397 at 408 - 409, Lawrenson Diecasting Pty Ltd (at 476), WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd (at 428) and Page v Walco Hoist Rentals Pty Ltd (No 2) (at [22]). [14] The principles of general and specific deterrence are also relevant in sentencing. The approach to be taken on that issue was also dealt with in some detail in Capral at 643 - 645; 59 - 62. Without detailing all that the Full Bench had to say we consider the approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench in Capral at 644; 60 as follows: [B]oth 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 Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163 at [40]-[43] we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted. [15] In the context of the above well established sentencing principles it will also be necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A of the Crimes (Sentencing Procedure) Act relevant to the respondents before the Full Bench. As was said in R v Way at [56]: [I]t is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c). 37 The facts of this matter demonstrate, in my view, that the defendant exhibited a disregard for safety in respect of the work being performed by Mr Moore. Although there were some systems in place at the Stud, they did not address the risk involved in carrying out this particular work. It was known that steel drums at the Stud may have contained flammable liquids at one time and it was also known that this particular drum had contained such liquids. Viewed this way, the risk posed by using oxyacetylene equipment to cut open a steel drum was obvious, as was the risk posed by exposing the drum to a naked flame. 38 In addition, there were relatively simple steps available that could have been taken to ensure that the risk was not present, such as flushing out empty steel drums to ensure that there were no flammable liquids and vapours remaining in the drums. These factors highlight the defendant's disregard for the most simple of occupational health and safety precautions, in respect of an obvious risk for which there were straightforward measures which would have avoided the risk. A failure to implement available measures supports a conclusion that the offence here may be judged as more serious than it otherwise might have been. See WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited (2000) 95 IR 383 at 450 - 451. 39 Accepting that there may have been a degree of aberrant behaviour on Mr Moore's part it is well settled that an employer's obligation is to ensure the health and safety of its employees and contractors. This obligation extends to the hasty, careless, inadvertent, inattentive or unreasonable employee and contractor. This is a facet of the pro-active nature of the duty described in such forceful terms by Hill J in WorkCover Authority of NSW (Inspector Egan) v Atco Controls Pty Limited (1998) 82 IR 80 where his Honour said "employers should be on the offensive to search for, detect and eliminate, so far as is reasonably practicable, any possible areas of risk to safety, health and welfare which may exist or occur from time to time at the workplace". See also Bauer J in WorkCover Authority of NSW (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248. In WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd (2001) 105 IR 81 the majority held: [45] The duty to provide a risk-free work environment is a duty owed not only to the careful and observant employee but also to the hasty, careless, inadvertent, inattentive, unreasonable or disobedient employee in respect of conduct that is reasonably foreseeable: Dunlop Rubber Australia Ltd v Buckley (1952) 87 CLR 313 at 320; McLean v Tedman (1984) 155 CLR 306 at 311 – 312 and WorkCover Authority (NSW) (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248. [46] We agree with the conclusions of the Full Bench in Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31 (at par 15) as follows: "The magistrate appears to have reached her conclusion as to the objective seriousness of the offence, having regard to the lack of common sense of the injured worker. It is reasonably clear from her decision that it was concluded that the conduct of the injured worker effectively removed or minimised the liability of the respondent in relation to the lack of training or instruction afforded the employee. This was wrong in principle. Section 15 of the Occupational Health and Safety Act requires employers to be diligent and proactive to ensure the safety of employees. Those obligations are not diminished because of the error or negligence of an employee, although such matters may reflect on the degree of culpability of the employer for the purposes of sentencing. We note the following observations of Bauer J in WorkCover Authority (NSW) (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 at 257: 'Much of what was urged by Mr King was directed to showing that the worker who was killed knew of, and therefore ought to have avoided the exposed electrical connections. In one sense such a submission militated against the position of the defendant; the very purpose of the Act was to introduce safe working practices so that accidents are prevented. The Act was designed to protect against human errors including inadvertence, inattention, haste and even foolish disregard of personal safety as well as the foreseeable technical risks in industry.' " (See also WorkCover Authority (NSW) (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 at 722). 40 And later at [48]: The employer must also guard against acts of inadvertence to the fullest extent practicable: Inspector Ankucic v Naomi Cotton Co-operative Ltd (unreported, 97/2251, 14 July 1998, Hill J). We note in this respect the observations of the Full Bench in Australian Grader Hire (at par 16) as follows: "Similarly, it is important for employers to actively ensure that instructions given are both sufficient for and complied with by employees. We refer to the judgment of Walton J, Vice President in WorkCover Authority of New South Wales (Inspector Glass) v Kellogg (Australia) Pty Limited (Unreported, 19 October 1999) as follows: 'In any event, the mere stipulation of procedures and instructions to carry out the work may not be enough to satisfy the requirements of s15 of the Act. The employer should ensure that procedures and instructions are actively and positively complied with by employees. In Dawson (at 121 and 125) the failure by a foreperson to supervise a qualified and experienced linesperson to the extent of instructing the employee as to the safest available method (where the employer had laid down a procedure for work and various methods of performing the work were available) would constitute a breach of s15 (although in that matter it was found the failure was that of the foreperson and not the employer). I note that in an English High Court case, Pope v Gould (HM Inspector of Health and Safety, 20 June 1996, unreported but cited at p 44 of Redgrave's Health and Safety, 1998, Third Edition) it was held in England, under the equivalent of s15, that it is not a sufficient defence for an employer to demonstrate that he had instructed the employee to operate machinery in a particular way and the employee had not followed his instructions. There, it was held, that the legislative provision was not concerned solely with the giving of instructions; rather it imposes upon the employer positive duties in relation to ensuring safe systems of work and safe machinery. It was held not to have been sufficient for instructions of a health and safety nature merely to have been given to employees; an employer must also ensure that those instructions are carried out (see also Haynes at 181-182, Kirkby at 53 and McMartin at 8)'." 41 Whilst the consequences of an accident will not, of itself, dictate the seriousness of the offence, the occurrence of serious injury, as occurred here, manifests the degree of seriousness of the risk to health and safety: Morrison v Powercoal Pty Ltd (2003) 130 IR 364 at [31] - [33] and the cases referred to therein. 42 It is necessary to consider the degree of culpability for the breach of occupational health and safety that can properly be attributed to the acts or omissions of the defendant in order to determine the gravity of the offence to which the defendant has pleaded guilty. The failure here is essentially a failure to provide a system of work with appropriate instruction and supervision. As I have already observed, the defendant had some systems of work in place but they did not deal with using an oxyacetylene set to cut open steel drums.It has been recognised by this Court that workers may act foolishly, as demonstrated in cases such as WorkCover v TRW [2001] NSWIRComm 52 at [13] and Inspector Woodington v Thiess Services Pty Ltd [2004] NSWIRComm 20 at [70]. Using oxyacetylene equipment to cut open a drum located on a Stud, without first assessing what substance had been contained in the drum was clearly foolish, and in my view, diminishes for the purpose of sentencing, the culpability of the defendant. 43 In Inspector Chris Chadwick v B H MacLachlan (NSW) Pty Ltd [2004] NSWIRComm 331, Haylen J dealt with an offence which occurred on a rural property. His Honour observed at [36]: It is undoubtedly true that working in remote areas of the Australian outback presents different issues for systems of occupational health and safety to those which might be found in a city factory or workplace. By its very nature, the work is likely to be undertaken at a considerable distance from available emergency services and often the work will be undertaken alone, although systems for remaining in contact with a homestead or a fellow worker are able to be used … Many people in rural industries learn their skills on the job and by word of mouth - the idea of a work manual would not seem odd but may prove to be ineffective as an instrument to promote occupational health and safety. In other cases, the court has noted that systems reduced to written format but not effectively enforced became mere paper systems which do not influence the actions of persons in the workplace ... 44 Although I am in general agreement with His Honour's observations, it must be remembered that in every prosecution brought under the Act, this Court emphasises the absolute obligation upon employers to ensure safety at their undertaking. It must be borne in mind that the offence here goes to the instruction, training and supervision of employees performing work with oxyacetylene equipment for the purpose of cutting open steel drums. Such instruction and training should have included a specific direction to flush out the drums, particularly if they had contained diesel or petrol. The defendant did not have a system in place to address the various risks that might arise from undertaking this work. The remedial measures adopted by the defendant illustrates how the risks to safety may be identified and eliminated. 45 The seriousness of the risk, its foreseeability and the ease or difficulty of removing that risk, renders this a serious offence. There is also the particular aggravating factor of the substantial injuries suffered by Mr Moore: s 21A(2)(g) of the Crimes (Sentencing Procedure) Act 1999. 46 In addition to the factors relating to the offence, the Court is required, in fixing penalty, to consider the need to deter others from committing the same crime and to deter the offender from re-offending. In Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at [71] - [80], the Full Bench recognised that in the industrial context, it would be rare that a sentencing court need not impose a sentence that includes an element of general deterrence. I consider it is appropriate to draw attention to the need for employers operating stud farms, to be constantly vigilant of the need to ensure that workers are not exposed to risks to their health and safety. I have, therefore, included an element in the penalty for general deterrence. 47 In relation to specific deterrence, the attitude of the defendant to questions of workplace safety and any steps taken to improve safety following an accident are relevant, as is the propensity for the defendant to re-offend. I accept that this is not a case which calls for the imposition of some additional specific punishment aimed at deterring the defendant from further offending against the Act and/or for the purpose of compelling the defendant's attention to occupational health and safety issues so that persons are not exposed to risks to their health and safety. The defendant has a good record in a difficult industry and has taken appropriate measures to avoid a recurrence of the offence. These measures will change the work culture within the Stud and ensure that safe operating systems are in place and hazards are readily identified and eliminated. However, the defendant continues to operate in an industry where there is the clear possibility of risks to health and safety. Accordingly, a small element of the penalty is in consideration of the need for specific deterrence. 48 The relevant subjective considerations include a plea of guilty. The plea was entered on the first of three days which were fixed for a defended hearing. The prosecutor accepted that it was given approximately five days notice of the change of plea and acknowledged that the defendant is entitled to a discount because of its plea of guilty. However, Mr Reitano submitted that any discount would not be substantial. 49 In R v Thomson; R v Houlton (2000) 49 NSWLR 383, Spigelman CJ (with whom Woods CJ at CL, Foster A-JA and Grove and James JJ agreed) discussed at [160] the guidelines applicable to offences against the laws of New South Wales as follows: (i) A sentencing judge should explicitly state that a plea of guilty has been taken into account. Failure to do so will generally be taken to indicate that the plea was not given weight. (ii) Sentencing judges are encouraged to quantify the effect of the plea on the sentence in so far as they believe it appropriate to do so. This effect can encompass any or all of the matters to which the plea may be relevant - contrition, witness vulnerability and utilitarian value - but particular encouragement is given to the quantification of the last-mentioned matter. Where other matters are regarded as appropriate to be quantified in a particular case, for example, assistance to authorities, a single combined quantification will often be appropriate. (iii) The utilitarian value of a plea to the criminal justice system should generally be assessed in the range of 10-25 per cent discount on sentence. The primary consideration determining where in the range a particular case should fall, is the timing of the plea. What is to be regarded as an early plea will vary according to the circumstances of the case and is a matter for determination by the sentencing judge. (iv) In some cases the plea, in combination with other relevant factors, will change the nature of the sentence imposed. In some cases a plea will not lead to any discount. 50 The above principles should be applied to the history of this matter which is as follows: (i) on 8 December 2006, the defendant entered a plea of not guilty; (ii) on 14 December 2006, the matter was fixed for hearing for three days commencing 17 April 2007; (iii) on 17 April 2007, a plea of guilty was formally entered on behalf of the defendant; (iv) the hearing dates fixed for the matter were vacated; (v) the hearing of the plea was programmed for 27 April 2007 and concluded in approximately 75 minutes. 51 The prosecutor acknowledged that Mr Moore and other witnesses were saved from having to prepare themselves to give evidence and that there was some utilitarian value in the plea. Having regard to the history of the matter, the defendant should be given a moderate discount for the plea of guilty when the utilitarian aspects are assessed with other relevant factors referred to in R v Thomson. I propose to allow a discount of 15 per cent for the utilitarian value of the plea. 52 I also take into account that the defendant co-operated with the WorkCover Authority in its investigation of the accident, the extensive and impressive remedial measures implemented by the defendant following the accident, the defendant's good corporate industrial citizenship and the defendant's obvious strong commitment to occupational health and safety. 53 A further important matter that I take into account is the assistance provided to the injured worker and the support offered to his partner. The evidence of Mr Thompson discloses the extent of that assistance. It included paying Mr Moore his full wage over and above any workers compensation payments; giving Mr Moore's partner six months leave on full pay to care for Mr Moore; providing improved accommodation; continuing to pay Mr Moore at his full rate of pay upon his return to work notwithstanding he has some limitations in respect of the level of work he can perform and the offer of ongoing employment for as long as he wishes. 54 The Full Bench in Corinthian Industries (Sydney) Pty Limited v WorkCover Authority of New South Wales (Inspector Wilson) (2000) 99 IR 159 stressed the importance of taking into account good industrial citizenship and the compassionate steps taken in respect of the injured worker. Their Honours observed at [17]: We do not consider that the history of good industrial citizenship of the appellant, having regard to its prior record and the long period of operation of its business, was sufficiently taken into account. We also refer to the careful and compassionate steps taken by the appellant as to the welfare, rehabilitation and continuing employment of the injured worker. The reason we have made specific reference to that latter matter is that it does not seem to have been often referred to in other judgments in this area... 55 The maximum penalty in this case, given that the defendant has no prior convictions, is $550,000. 56 I consider an appropriate penalty, taking into account all of the circumstances set out earlier in these reasons is $65,000. 57 The prosecutor sought costs and a moiety of the fine, which I propose to order. 58 Finally, in my view, it is appropriate to observe, bearing in mind the circumstances of this matter, that it may have been appropriate for the prosecutor to have given consideration to seeking an order under Pt 7 Div 2 of the Act. This Division gives the Court power to make an order in connection with an offence either with or without the imposition of a monetary penalty. ORDERS 59 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 $65,000 with a moiety 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, 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.