Industrial Court of New South Wales CITATION: Inspector May v Reckitt Benckiser (Australia) Pty Ltd [2009] NSWIRComm 63 PROSECUTOR WorkCover Authority of New South Wales PARTIES: DEFENDANT Reckitt Benckiser (Australia) Pty Ltd FILE NUMBER(S): IRC 1867 of 2008 CORAM: Marks J CATCHWORDS: OHS prosecution - failed to ensure persons other than employees were not exposed to risks to health and safety - guilty plea - penalty - work undertaken at time of incident was under direct control of defendant - defendant had no systematic, structured and programmed approach to the manner in which the task was to be undertaken - no risk assessment - no information, instruction, training or supervision - defendant had not yet reached the stage of considering risks - breach is a most serious one - deterrent effect - mitigating factors - prior convictions - penalty imposed. LEGISLATION CITED: Occupational Health and Safety Act 2000 s8, s10 CASES CITED: R v Olbrich (1999) 199 CLR 270 HEARING DATES: 19 December 2008 and 24 April 2009 DATE OF JUDGMENT: 12 May 2009 PROSECUTOR Mr M Scott of counsel Solicitor: WorkCover Authority of New South Wales Legal Group LEGAL REPRESENTATIVES: Ms A Wong DEFENDANT Mr M Cahill of counsel Solicitor Sparke Helmore solicitors Mr P Thompson JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Marks J Tuesday 12 May 2009 Matter No IRC 1867 of 2008 Inspector Megan May v Reckitt Benckiser (Australia) Pty Ltd Prosecution under s 8(2) of the Occupational Health and Safety Act 2000 JUDGMENT [2009] NSWIRComm 63 1 The defendant, Reckitt Benckiser (Australia) Pty Ltd, has been charged by the prosecutor, Inspector Megan May of the WorkCover Authority of New South Wales, with a breach of s 8(2) of the Occupational Health and Safety Act 2000 ("the Act"). S 8(2) is in the following terms: 8 Duties of employers (2) Others at workplace An employer must ensure that people (other than the employees of the employer) are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work. 2 The application for order charged the defendant with "being an employer, on 30 September 2006 at 27 – 33 Frank Street Wetherill Park in the state of New South Wales ("the premises") (it) failed to ensure that persons other than its employees and in particular, Wayne Northey and Matthew Ryan were not exposed to risks to their health or safety arising from the conduct of the defendant's undertaking while they were at the defendant's place of work." 3 The particulars of the charge are as follows: "a) The defendant failed to provide persons undertaking work at their premises with a safe system of work for the dismantling of a cool room; b) The defendant failed to provide any or any adequate information, instruction and training to persons undertaking work at the premises; c) The defendant failed to provide adequate supervision to non employees undertaking the task of dismantling a cool room at its premises; d) the defendant failed to undertake and implement any or any adequate risk assessment in relation to the task of dismantling a cool room; e) The defendant failed to ensure that non employees undertaking work at the premises, were inducted into the premises; As a result of the defendant's failures non employees, in particular Wayne Northey and Mathew Ryan, were placed at risk of injury and in fact suffered serious injuries." 4 There was an alternative charge brought under s 10(1) of the Act. This was not proceeded with. 5 The defendant pleaded guilty and this judgment is concerned only with the question of penalty. 6 An agreed statement of facts was tendered into evidence which was in the following terms: "1. At all material times the Prosecutor was an Inspector duly appointed under Division 1 of Part 5 of the Occupational Health and Safety Act 2000 ("the Act") and empowered under Section 106(1)(c) of the Act to institute proceedings in the within matter. 2. At all material times Reckitt Benckiser (Australia) Pty Ltd [ACN 003 274 655] ("the defendant") is and was at all material times a corporation whose registered office is situated at 44 Wharf Road, West Ryde, in the State of New South Wales. The defendant was incorporated on 3 July 2000. 3. The defendant is and was at all material times a corporation that manufactures and sells a range of household products and imports and sells a range of pharmaceutical products. 4. Prior to September 2006 the defendant manufactured household products on premises located at 27-33 Frank Street, Wetherill Park, in the State of New South Wales ("the premises at Wetherill Park"). 5. In September 2006 the premises at Wetherill Park were in the process of being closed down and the manufacturing operations, which had been undertaken at the premises at Wetherill Park were transferred to the defendant's premises at West Ryde. As a consequence, nearly all of the plant and equipment at the premises at Wetherill Park had been relocated to the defendant's premises at West Ryde (also referred to as "the Ermington site"). Background 6. At the time of the incident Mr Wayne Northey was approximately 47 years of age and had been engaged by the defendant as a contractor. Mr Northey initially commenced employment with the defendant as a labour hire employee in 1994, and in 1998 was then employed by the defendant as a permanent employee to late 2002. Following a two year break, in August 2004, Mr Northey sought re-engagement with the defendant as a contractor and remained in this role at the time of the incident. Mr Northey was contracted to the defendant as a maintenance fitter and his usual duties included the repair and maintenance of production machinery, installation, removals and occasionally sweeping the floor. Mr Northey worked weekdays at the defendant's West Ryde premises. For approximately 18 months prior to the incident he had also been regularly working on Saturdays at the defendant's Wetherill Park premises. His duties at Wetherill Park usually involved the installation and maintenance of manufacturing installation equipment. 7. At the time of the incident Mr Mathew Ryan was approximately 48 years of age and was employed by a labour hire company, Chandler Macleod Limited t/as Ready Workforce ("Ready Workforce"). Mr Ryan was placed by Ready Workforce and commenced work at the West Ryde site on Monday 25 September 2006, five days prior to the incident. 8. Prior to obtaining employment with Ready Workforce, Mr Ryan was known to Mr Northey. Mr Ryan spoke with Mr Northey about obtaining work with the defendant and then applied for placement at the defendant's West Ryde site through Ready Workforce. 9. Prior to the incident Mr Ryan had mainly undertaken trade fitting as a maintenance person and supervisory roles. He understood his role with the defendant was as a maintenance fitter. 10. At the time of the incident Mr Marvin Lay was a production supervisor at the defendant's Wetherill Park premises and the person in charge at those premises for cleaning up the factory and preparing plant and equipment at the premises for relocation. Mr Lay was employed by the defendant at the time of the incident. 11. On the Saturday prior to the incident, Mr Northey was requested by Mr Lay to remove the refrigeration unit and then to dismantle the cool room. As this task was not completed, Mr Northey was asked by Mr Lay to return to the premises to complete the task on the day of the incident. 12. When asked by Mr Lay on the following Tuesday if he would return to the premises to complete the tasks commenced on the previous Saturday, on 30 September 2006, Mr Northey indicated that he could provide assistance to complete the demolition of the cool room and offered to bring a "friend, namely, Mr Ryan who had commenced employment at the West Ryde Site through Ready Workforce, to assist him. This offer was originally rejected by Mr Lay. However, on Friday, 29 September 2006, having reviewed the amount of work that needed to be done the following day [i.e. the day of the incident], Mr Lay rang Mr Northey at home and requested of Mr Northey that he bring his "friend" with him the following day to assist Mr Northey with the demolition of the cool room. 13. Mr Northey contacted Mr Ryan in the early evening on Friday and advised him that Mr Lay wanted him to work on the Saturday and arranged to pick Mr Ryan up at 5.45am. No arrangements were made as to how Mr Ryan would be paid and Ready Workforce were not advised of the additional hours or location Mr Ryan would be working. Mr Ryan assumed as he was undertaking work for the same host employer he would just put the hours of work on Saturday on his time sheet. Incident 14. Just after 6:00am on Saturday, 30 September 2006, Mr Ryan and Mr Northey arrived at the defendant's Wetherill Park premises. Mr Northey took Mr Ryan inside the factory complex. Mr Northey saw Mr Lay with a group of workers and took Mr Ryan over to introduce him to Mr Lay. Mr Northey asked Mr Lay what he wanted them to do first up and Mr Lay instructed him to dismantle the cool room which was to be moved to the West Ryde site. 15. Mr Ryan and Mr Northey discussed how they were going to dismantle the cool room and then proceeded to bring tools, a forklift, ladder and other equipment into the area to help them with the job. 16. They put the forklift up to the cool room roof with a pallet attached, and discussed what procedure they would go through. 17. Mr Northey and Mr Ryan then got up on the roof of the cool room via a ladder to dismantle the cool room's motor and compressor. At approximately 6.45am whilst Mr Northey and Mr Ryan were on the cool room roof discussing how to remove the compressor and the motor, Mr Northey who had been crouching, stood up and stepped back just as the roof collapsed. 18. As a consequence of the collapse of the roof of the cool room, Mr Northey and Mr Ryan fell approximately 2.5 metres to the cool room floor. Mr Northey recalls lying on the ground covered in dust, he could not see much and called out to Mr Ryan. There was no response. Mr Northey could not get up due to severe pain in his back, but he was able to reach into his pocket and get his mobile phone. Mr Northey then rang Mr Lay and told him the roof had collapsed and to send help. 19. As a result of the incident Mr Northey suffered five fractured vertebrae and was off work for two months. On 17 October 2006, Mr Northey attended the West Ryde site with a certificate indicating he was fit for light duties. On 29 November 2006, Mr Northey provided a certificate indicating he was fit to resume pre injury duties. 20. Mr Ryan suffered crushed vertebrae in his neck, a broken rib and collarbone, and lacerations to his head as a result of the incident. As at 26 June 2007 Mr Ryan was certified fit for light duties. However, as at 28 June 2007 (the date of the Record of Interview), Mr Ryan was not performing any work duties. 21. Mr Northey's work experience was mainly trade occupations, involving maintenance and machining, and Mr Ryan's work experience was mainly as a maintenance fitter. Neither Mr Northey nor Mr Ryan had previously undertaken the task of dismantling a cool room. System of Work 22. Prior to the incident there was no documented safe system of work in place for the dismantling of the cool room. No safety procedures, safe work method statements or safe operating procedures were provided to Mr Northey or Mr Ryan prior to their undertaking the task of dismantling the cool room. Mr Lay did not provide any information or instruction as to how the task was to be undertaken, or provide any information in relation to the condition of the cool room's roof and weight capacity. Mr Lay made no enquiries as to the system of work Mr Northey and Mr Ryan were intending to use when dismantling the cool room or their competency to undertake the task. Mr Ryan and Mr Northey were left to establish their own system of work for the task. Mr Lay did not provide Mr Northey or Mr Ryan with any information as to working safely at heights. Information, Instruction, Training and Supervision 23. The defendant did not provide Mr Northey and Mr Ryan with any training in relation to the task of dismantling a cool room or working at heights. 24. The defendant did not adequately supervise Mr Northey and Mr Ryan whilst they were undertaking the task of dismantling the cool room. 25. The defendant did not conduct a documented risk assessment of the task of dismantling of the cool room. Mr Lay conducted an informal risk assessment in relation to the dismantling of the cool room on 23 September 2006, but did not conduct any risk assessment on 30 September 2006 26. At the time of the incident the defendant had a "Management of Contractor & Visitors Policy" which required an induction for contractors and visitors and the undertaking of a risk assessment for any work involving working at heights. 27. The defendant did not provide Mr Northey and Mr Ryan with any site induction for the Wetherill Park premises. The defendant failed to give effect to their above mentioned policies with regard to Mr Northey and Mr Ryan performing work on 30 September 2006. Steps Taken After the Incident 28. Following the incident, the defendant was issued with several improvement notices relating to the provision of instruction, training and information to employees, provision of a safe system of work for working at heights and the implementation of a system for recording induction training. The improvement notices were complied with by the defendant. 29. Following the incident Reckitt Benckiser revised and reissued their working at heights policy and relevant employees were trained on the new Safe Operating Procedure. Refresher training was also carried out on the contractor induction and risk assessment process. The defendant also reviewed all their contractor induction records to ensure they were up to date with requirements of their own policies. Cooperation with Workcover 30. The defendant co-operated with the prosecutor in the investigation of the incident. Documents The following supporting documentation is annexed: a) 13 colour photographs taken on 4 October 2006 by Inspector Andrew Rowe; b) 22 colour photographs taken on 25 October 2006 by Inspector Megan May; c) 9 colour photographs taken by NSW Police; d) Factual Inspection Report of Inspector Rowe dated 16 September 2008; e) Reckitt Benckiser "Management of Contractor & Visitors Policy (West Ryde Site)"; f) Improvement Notice 7-123817 g) Improvement Notice 7-117378 h) Improvement Notice 7-134538 i) Prior convictions certificate." 7 The documentation referred to in the agreed statement of facts also became evidence in the proceedings. 8 For the defendant an affidavit of Richard Gordon Cover, Head of Technical Services of the defendant became evidence in the proceedings. The defendant currently employs 627 persons throughout Australia most of whom are employed within New South Wales. 9 As is made clear from the agreed statement of facts, the incident which gave rise to these proceedings occurred when two contractors were engaged to dismantle a cool room. Notes made by a WorkCover inspector indicated at the time of his inspection "The roof of the cool room was located on the floor inside the four walls which (sic) the walls remain standing." There was a further notation that the cool room measured approximately 5 metres by 5 metres with a height of 2.5 metres. The construction of the walls and roof of the cool room was said to be "a hard plastic shell on either side of polystyrene insulation." 10 The work that was being undertaken at the site at the time of the incident appears to have been under the direct control of the defendant. It did not retain any third party building contractor to carry out the work. 11 The work was carried out under the principal control and supervision of a production supervisor employed by the defendant, Sovung Lay, also known as Marvin Lay. Mr Lay has tertiary qualifications in civil engineering gained at a university in Taiwan and had worked as a civil engineer in Taiwan for two years prior to commencing employment with the predecessor of the defendant on 8 October 1984. Whether and to what extent Mr Lay had any qualifications, expertise or experience in connection with the work being carried out on the day of the incident is not known. 12 Mr Northey was said by Mr Cover to be a "sole trader contracted to work for (the defendant) as a maintenance fitter" on a production line. He commenced his work as a maintenance fitter on 2 August 2004 but had previously worked for the predecessor to the defendant between 1994 and 1998 as a full-time employee. He held qualifications in the nature of a forklift licence, boiler operator's ticket, fitting and machining trade certificate and pneumatics certificate. He had received training from the defendant but not training in connection with the undertaking of the type of work that he was asked to perform on the day of the incident. 13 Mr Ryan was also primarily qualified as a maintenance fitter rather than in work involving the construction and demolition of structures. 14 No information was put before the Court concerning the properties of the material in which the cool room was constructed and, particularly, the roof. It was asserted by both the prosecutor and the defendant that the properties of the roof material, in particular going to matters such as its structural strength, were irrelevant because no risk assessment had been carried out in any event. Furthermore, the defendant stressed that on the basis of such evidence as was put before the Court, no adverse inference could be drawn against the defendant concerning the properties of the roof material because the factual basis for any such adverse inference would need to be established beyond a reasonable doubt. In making this submission, counsel for the defendant relied upon the well known authority of the High Court of Australia in R v Olbrich (1999) 199 CLR 270. I agree with this submission. 15 The starting point for the assessment of penalty is a consideration of the objective seriousness of the offence. As is clear from the agreed statement of facts, the defendant did not have in place any systematic, structured and programmed approach to the manner in which the dismantling of the cool room was to be undertaken. There was no risk assessment of any kind. Accordingly, no-one assessed whether it was safe to stand on the roof and no-one assessed or considered in any way the best way of going about dismantling the cool room. Furthermore, there was no information, instruction, training or supervision given to either Mr Northey or Mr Ryan. 16 This is not, in strict terms, a case where the consequences of a particular act were readily foreseeable in all the circumstances. Such an observation may be made when there are known risks that are readily ascertainable. In the circumstances of these proceedings, the defendant had not reached the stage of considering any actual risks to the health and safety of the contractors involved in the particular operation. That is because it had not yet reached the stage of considering what those risks might have been. This is a more culpable situation. The defendant may take some comfort in the fact that Mr Lay, who was in charge of the operation, had qualifications as a civil engineer and that both of the contractors were skilled tradespersons rather than unskilled labourers. Nevertheless, the defendant clearly failed to comply with its obligations under the Act in the manner set out in the agreed statement of facts. 17 In all the circumstances, the breach by this defendant of the Act must be characterised as a most serious one. 18 In assessing penalty, I shall also have regard to the general deterrent effect of any penalty imposed as well as the deterrent effect on this defendant. In assessing the extent to which specific deterrence should be taken into account, I accept the defendant's submission that the overall evidence concerning the defendant's commitment to its occupational health and safety obligations permits such a matter to be taken into account in qualifying the need to create a deterrent effect for this particular defendant. 19 There are, however, some mitigating factors which I shall take into account, the effect of which will ameliorate the amount of any penalty to be imposed. 20 The defendant pleaded guilty to the charge at an early appropriate time. It has expressed remorse and contrition for what has occurred and co-operated with the WorkCover Authority in the conduct of its investigation following the incident. It also complied with improvement notices issued by the prosecutor. 21 The evidence of Mr Cover is to the effect that the defendant has at all times had in place a comprehensive and proactive approach to the discharge of its obligations under the Act with respect to the conduct of its business which involves the manufacture and importation of a wide range of household products. Following the incident, the defendant reviewed it processes and procedures and has put in place systems which will hopefully avoid any further incident of this kind. 22 The defendant has prior convictions for four offences prosecuted before the Chief Industrial Magistrate, such convictions being recorded in 2000, 2001 and two in 2003. Having regard to the nature and extent of its activities, I would regard the defendant's past record as being good, notwithstanding these four convictions. 23 However, the fact that the defendant has had prior convictions results in the maximum applicable penalty being the sum of $825,000. 24 Having regard to all of the matters to which I have referred, I am of the opinion that the appropriate penalty is the sum of $190,000. 25 The prosecutor sought a moiety of the penalty and a costs order, neither of which was opposed. Orders 26 I make the following orders: 1) The defendant is found guilty of the offence under s 8(2) of the Act with which it is charge and is convicted accordingly. 2) I impose a monetary penalty of $190,000 with a moiety to the prosecutor. 3) The defendant is to pay the prosecutor's costs in an amount assessed by the Court in default of agreement. 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