Industrial Court of New South Wales CITATION: Inspector David Singh v ABB Australia Pty Ltd [2007] NSWIRComm 274 PROSECUTOR: Inspector David Singh PARTIES: DEFENDANT: ABB Australia Pty Ltd FILE NUMBER(S): IRC 7574 of 2004 CORAM: Haylen J CATCHWORDS: Occupational Health and Safety Act 2000 - s 8(2) - breach established in contested proceedings - sentencing hearing - environmental scientist undertaking hazardous material inspection - work performed in roof of factory - risks associated with working at height and close to electrical lines powering overhead cranes - usual safety induction not carried out by defendant - no instruction given about working at height or near electrical lines - objective seriousness of offence - unusual circumstances of factory decommission a mitigating factor - significant safety requirements in operation - special and specific deterrence considered - subjective factors - penalty imposed CASES CITED: Inspector David Singh v ABB Australia Pty Ltd [2007] NSWIRComm 62 WorkCover Authority (NSW) v Denson and ors (2007) 162 IR 199 HEARING DATES: 2 November 2007 DATE OF JUDGMENT: 7 November 2007 PROSECUTOR: Mr R Reitano of counsel SOLICITORS: DLA Phillips Fox LEGAL REPRESENTATIVES: DEFENDANT: Mrs W Thompson of counsel Solicitors: Middletons Lawyers JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: HAYLEN J 7 November 2007 Matter No IRC 7574 of 2004 INSPECTOR DAVID SINGH v ABB AUSTRALIA PTY LTD Prosecution under s 8(2) of the Occupational Health and Safety Act 2000. JUDGMENT [2007] NSWIRComm 274 1 On 22 March 2007, the defendant, ABB Australia Pty Ltd was found guilty of a breach of s 8(2) of the Occupational Health and Safety Act 2000. In those proceedings it was alleged that on 14 January 2003, the defendant failed to ensure that persons not in its employment, and in particular, Mr Stephen McCormack were not exposed to a risk to their health or safety arising from the conduct of the defendant's undertaking while at the defendant's place of work. The particulars of the defendant's contravention were: a failure to adequately restrict access to dangerous areas of the premises, the overhead cranes at the premises being the means of approaching within the vicinity of live electrical wires at the premises; and, a failure to provide adequate information and instruction in relation to overhead cranes, work at heights, and live electrical wires so as to enable environmental audit work to be undertaken safely at the premises. 2 On the day in question, Mr McCormack was employed by Consulting Earth Scientists ("CES) a business concerned with environmental consulting CES had been contracted to provide a hazardous materials audit and a soil and preliminary ground investigation at a factory situated at Bay Street, Botany. At the Bay Street premises the defendant conducted an electrical and mechanical engineering business in a factory that was described as being approximately 100 metres in length with 15 metre wide bays. Approximately 9 metres above the floor of the factory were overhead travelling cranes that were electrically operated. A steel ladder provided access to the cranes. 3 The defendant was the lessee of the premises, and at the time that Mr McCormack attended the factory site it was in the course of being decommissioned, with machinery and equipment being removed to a new site to be operated by the defendant. However, at the time of Mr McCormack's visit, work was continuing in some of the factory bays but in other bays no work was being performed and the defendant's machinery had been removed. Mr McCormack was employed as a senior environmental engineer and had attended the factory site to assess hazardous materials prior to the re-development of the factory site. That task required him to inspect, amongst other things, the roof area to see if any part of it contained asbestos. He was also to take fibre, dust and other samples and inspect the light fittings. To perform this task, Mr McCormack obtained access to the roof of the factory and used a stationary overhead crane. In the course of inspecting light fittings at the end of the overhead crane, Mr McCormack came into contact with live electric cables that energised the crane and was severely injured. 4 The judgment dealing with liability was reported as Inspector David Singh v ABB Australia Pty Ltd [2007] NSWIRComm 62. The present judgment deals with the evidence and submissions on penalty. In the judgment of the Court dealing with liability, the following matters were found to be of significance: (a) the defendant had been made aware that Mr McCormack and other representatives from CES would be under their strict supervision and that CES had been instructed to comply with the Occupational Health and Safety Regulations of the defendant, including any site safety induction and entry requirements; (b) the defendant was aware, in general terms, of the purpose of the CES presence at the site which was to inspect and detect hazardous materials or contamination. Although arrangements had been made for this particular visit for performance of that task, representatives of the defendant had forgotten about the arrangements and no steps had been taken to conduct an appropriate induction in accordance with the defendant's usual policy in relation to people coming to work on the site. No alternative arrangements were made for another representative of the defendant to conduct the site and safety induction and no information was left at the site as to when Mr McCormack and his colleague were to attend the site or the purpose of their visit; (c) the usual approach of the defendant under its safety policy was to conduct an induction involving a description of the site in areas where the work was to be performed, but also a discussion as to the nature of the work to be performed in order that a job safety analysis could be conducted to identify potential risks while carrying out that work. A job safety analysis/risk assessment was not carried out on the day of the accident. The circumstances of Mr McCormack's attendance resulted in only a broad discussion of the work to be performed and there was no detailed analysis of that work, where it was to be performed, and what dangers might be confronted; (d) it was known that Mr McCormack wanted to inspect the roof although he had not indicated that he also wished to inspect the lighting, but it was known that he was there to take samples of the building. Mr McCormack was informed of the means by which he could obtain access to an overhead crane to inspect the roof but he was not warned to stay away from the end of the overhead crane where live electrical wires were located. The defendant did have signs in the roof area stating "Danger. Live Wires" but those signs did not indicate the location of the wires, nor were the wires visible from the walkway of the overhead crane. Mr McCormack had been told that the crane he was directed to use for the purpose of his inspection was not working and no instruction was given to him as to where to go or not to go while using that overhead crane. Mr McCormack was informed that the crane had not operated for two years. He was told there were other cranes working that could nudge the "dead crane" and that could be felt while working on the crane. Neither the signage in the roof, nor the discussion with representatives of the defendant held prior to the work being undertaken by Mr McCormack identified where the live wires were situated, or, what the dangers were of working from the overhead crane which itself had a handrail only on one side as well as a walkway that contained voids and obstacles; (e) there was otherwise no restriction on access to the roof area and although it was difficult to obtain access to the end of the crane where the live wires were present, maintenance employees had access to this area to perform their duties. In addition, the defendant's safety system identified the danger of working at heights and the need to use safety harnesses. However, when Mr McCormack arrived at the site he did not have a safety harness and it was never suggested to him by any representative of the defendant that he should use equipment of that nature when working in the roof area where there was a potential risk of falling nine metres; (f) the circumstances of Mr McCormack's arrival at the site on the day, without those present at the factory site being aware of his attendance or the purpose of his attendance, led to the usual safety practices of the defendant not being followed on this occasion, bearing in mind the defendant was in the process of de-commissioning the factory. In those circumstances, the defendant's representative concentrated upon dangers working at the floor level of the factory but, did not consider there would be any risks in working in the roof of the factory, although it was known that Mr McCormack was to take soil, fibre and dust samples and was not, therefore, necessarily simply inspecting the roof only for the presence of asbestos. 5 At the sentence hearing the prosecutor relied upon the findings made by the Court in the contested prosecution proceedings. The only additional evidence was a record of a conviction for a breach of s 8(2) of the Act incurring a penalty of $70,000 imposed by the Court. That offence was dealt with in 2005 and concerned an incident that occurred within a period of approximately six months of the incident involving Mr McCormack. That offence did not take place in the defendant's factory but occurred at a client's workplace and involved a fall from height during the course of replacing a platform floor of a conveyor. A supervisor had requested the use of harnesses but they were not available and the work continued without them. The workers fell five metres and recovered from the injuries they received. The defendant had entered a plea of guilty to that charge. Although that matter was dealt with before the present offence, it was common ground that the breach in fact occurred after the breach presently before the Court and in accordance with the decision of the Full Bench in WorkCover Authority (NSW) v Denson and ors (2007) 162 IR 199, this matter was to be treated as a first offence exposing the defendant to a maximum penalty of $550,000. 6 The evidence for the defendant was constituted by an affidavit with numerous annexures sworn by Ms Marian McLean, who is currently the Country Occupational Health and Safety Manager for the defendant, having held that role since August 2003. Ms McLean also held the role of South Asia Regional Occupational Health and Safety Advisor for the defendant, a role that she had occupied since the beginning of 2006. Ms McLean described the defendant as a national engineering company involved in power and automation technologies who manufactured high, medium and low voltage switch gear as well as manufacturing small distribution transformers. It had a number of large and well known companies as clients, and for some of those clients performed service maintenance on electrical and mechanical equipment. When this work was undertaken it was performed at the client's site. Ms McLean stated that the defendant conducted a highly sophisticated undertaking and required a very skilled workforce to carry out its activities. The defendant employed approximately 1800 people on any given day and would engage a similar number of contractors throughout Australia. At the present time the defendant had approximately 700 employees working in New South Wales with approximately 700 contractors engaged in the State. Those employees and contractors were spread over eight operational sites in Sydney, Newcastle and Wollongong. The repair of electrical motors that had been undertaken by the defendant at the Botany workshop had now been transferred to its Port Kembla Service Centre. 7 Ms McLean spoke in detail about the defendant's system of occupational health and safety. She was the most senior safety employee engaged by the defendant within Australia and reported directly to the Chief Executive Officer of the defendant. The defendant employed 13 dedicated safety co-ordinators for whom Ms McLean had functional responsibilities. In addition there were other employees such as line managers who were actively involved and had accountability in relation to safety. The defendant had attained accreditation under the latest New South Wales Government Occupational Health and Safety Management Systems Guidelines, achieving accreditation at its first attempt and it had also been accredited under a previous Government requirement. It was pointed out that accreditation followed an actual investigation of whether or not the system put in place by the defendant was working and effective. 8 Each year the defendant implemented an occupational health and safety plan and the defendant was also audited by DuPont. Under the safety plan, the defendant stated that it did not want anybody to get hurt at work and everyone took responsibility for their own safety and the safety of others but that all accidents were preventable. Safety was considered regularly at all levels. As part of her duties, each quarter Ms McLean was required to report on safety matters to the Board of Directors. Below the Board, a safety steering committee operated comprising of a senior management team and that committee considered safety initiatives. In 2005, a sub-committee was responsible for reviewing and improving the defendant's contractor management system. The sub-committees actively involved the defendant's managers in a safety programme. Also, monthly management meetings were held where safety was the first agenda item and in those meetings, Ms McLean presented the results of audits and inspections, the progress of the defendant's training programmes and lessons learned from any safety alerts or incidents that may have occurred. All the defendant's projects and sites were required to submit a monthly safety report to Ms McLean and those reports were dealt with under "leading" and "lagging" safety indicators. Ms McLean was informed of every notice issued by State WorkCover Authorities to the defendant and was informed whether an employee or non-employee required medical treatment. In this way she ensured that there was consistency in reporting matters and that a true picture was available to the senior management team when ensuring compliance with legislative safety requirements. At the business and site level, the defendant's managers conducted their own operational safety meetings and there were safety committees established at every site and they met monthly. In her position, Ms McLean had the authority to demand to be given all safety material that she deemed necessary and she carried out scheduled and unscheduled or random audits on various business units. A similar role was undertaken by the 13 co-ordinators. The defendant insisted on work permits and a job safety analysis being filled out before work commenced and a job safety analysis had long been part of the defendant's safety system. Through the process of work permits, job safety analysis and toolbox meetings people actually performing the work were given the opportunity to comment on and suggest changes to improve the system of work before signing on for the job. In line with this approach, the defendant introduced a programme where employees carried a small pocket-sized booklet which was a hazard alert notepad: each employee had been instructed to carry the notebook at all times and to record any risk or safety hazards which was observed and was unable to be immediately remedied. The defendant also ran safety poster campaigns and the safety rules were available on the defendant's external internet site allowing employees access to a range of safety documents, including local safety alerts and newsletters. The defendant's operation were frequently audited by its clients and those audits were in addition to safety audits carried out by independent certification bodies. 9 The defendant had implemented a large number of safety procedures and forms that were referred to in the evidence. It had also been recognised for its safety initiatives by winning awards and had conducted an internal competition in 2003 and 2004 encouraging employees to suggest innovative safety improvements and programmes. In relation to the financial resources made available by the defendant for the purposes of safety, Ms McLean said that there was no separate safety budget but that safety was built into every workplace and every site. The defendant expected its managers, when estimating the costs of a project or process, to include safety costs. 10 All employees and contractors to the defendant were required to undertake safety induction before being permitted to commence work. As a result of the accident involving Mr McCormack, the defendant completely revised the company induction programme, site access procedures and had tightened up contractor procedures. The defendant had also issued a direction that contractors were to report to the person they were dealing with and that person was to induct a contractor at the work site. In 2005, the defendant immediately increased contractor management and now assessed a contractor's competency prior to work commencing. There was now an on-line safety induction for employees and contractors involving a progressive questionnaire. The results were retained on a data base and for employees, a two day face-to-face induction was conducted approximately three months after employment commenced to reinforce the defendant's safety values and principles. The defendant also issued an Occupational Health Safety and Environment handbook for employees, contractors and sub-contractors and the handbook had been reviewed and re-issued several times since the accident. In addition, the defendant had a drug and alcohol policy in a booklet available in the workplace as part of a two-day programme introduced in 2005 and in that year the defendant commenced a safety leadership training programme for senior managers. Since then, the defendant had designed a two-day safety leadership programme for line managers comprising a programme which commenced in 2006. All the defendant's senior line managers had been trained in a behavioural safety programme and that programme involved managers talking to employees about the safety aspects of the job they were doing, correcting bad behaviour and praising good work behaviour. 11 Although the defendant had moved from the Botany site, the nature of its business still required the use of overhead cranes. Immediately after the accident, the defendant instructed all operators to introduce a system to stop unauthorised access to the cranes and a metal cover was placed over the lower rungs of the access ladder and padlocked into place thus preventing unauthorised access. Any employee or contractor wishing to obtain access to the overhead crane was required to produce a work method statement to the relevant site supervisor and that supervisor would review the statement and, if appropriate, provide permission for access to the cranes. Before the padlocks were removed from the cover to the access ladder, the crane was to be electrically isolated. When the power was isolated, both the contractor and a representative of the defendant verified the isolation and lockout of the switch. 12 After the accident, the defendant required that all operational areas were to have an occupational health and safety management plan and a safety management action plan addressing the business specific occupational health and safety risks faced by the defendant. All business occupational health and safety plans were audited annually and the results of the audits discussed at operational management meetings. The safety procedures for visitors and contractors had been reviewed and implemented and the procedures were described in inductions, in the safety plans and on site procedures. The defendant had focused on improving its occupational health and safety communication systems and issued monthly safety newsletters as well as safety alerts concerning any lost time incidents or incidents giving rise to lessons for the whole company. 13 Ms McLean referred to a number of documents detailing the defendant's contribution to communities in which the defendant operated and those documents also dealt with a number of charitable projects supported by the defendant and its staff. Ms McLean emphasised that the defendant was committed to the safety of all persons in its workplace and sought to achieve no incidents and no injuries. On behalf of the defendant, she expressed the defendant's sincere regret for the injuries received by Mr McCormack. Ms McLean was not cross-examined. DELIBERATION 14 Counsel for the prosecutor noted that, in essence, the charge found proved involved two elements: the risk of falling from a height and a risk of electrocution. It was emphasised that these risks were known as demonstrated by the danger signs in the roof of the building and that the defendant's safety procedures warned about working at heights. It was submitted that this was an objectively serious offence because the risk was obvious and known to the defendant and therefore was to be considered as constituting an offence at the higher level of the range. The circumstances in which Mr McCormack was electrocuted suggested that it was a matter of good luck rather than anything else that resulted in him collapsing across the beams in the roof rather than falling the nine metres to the concrete floor below where very serious and possibly fatal injuries may have been inflicted. 15 Counsel for the defendant emphasised the fact that this was not a case where there was an absence of safety systems or where there had been a ongoing or longstanding omission in the system: the defendant was a large employer in a sophisticated industry and had a well developed and comprehensive system of safety in operation and it appeared to have been the circumstances surrounding this particular visit by the employees of CES that led to that system not being fully implemented. The defendant was in the throes of decommissioning the factory and had removed an amount of machinery by the time Mr McCormack attended and arrangements had not been made for a proper induction to take place. The induction that was conducted occurred when Mr McCormack unexpectedly arrived for those at the site and the usual induction practice was not followed. There had been a prior visit to the site where the principal of CES had participated and was thereby aware of the nature of the site but CES had taken no steps to brief Mr McCormack about the nature of the site and its potential risks nor had it prepared a job safety analysis. Mr McCormack had not informed the defendant of the full nature of the work he was to undertake in the roof of the factory, and, being a skilled environmental engineer, he had knowingly exposed himself to the risk of falling by walking on to the narrow beam at the end of the overhead crane. 16 There is a good deal of force in the defendant's submissions, but this breach must be considered as constituting a serious offence. This case presents another example of experienced and qualified people, probably absorbed in their task, taking risks in the way the work is performed. It has been observed in many cases in this jurisdiction that the occupational health and safety legislation nevertheless requires employers to take all steps available to ensure the safety of persons working at their work site, even though some of them may act negligently or carelessly. Mr McCormack attended at the site to take a variety of samples in conducting an environmental survey and was given access to the roof area without the defendant obtaining from him a full explanation of what work he intended to perform so that the risks associated with that work could be evaluated. I accept the defendant's submission that this was its usual practice and that it had in operation a detailed safety system and that it was probably the disruption of the decommissioning and the failure of the defendant to adhere to prior arrangements that led to this temporary break down in its safe system of work. While those aspects are to be recognised and assist in placing this breach within an appropriate penalty range, it does not lead to the conclusion that this was other than a serious breach of the Act, involving risks readily identified by the defendant. 17 Counsel for the defendant accepted that general deterrence was a proper consideration in this matter but that specific deterrence should play a much reduced role having regard to the circumstances already referred to and also having regard to the significant steps taken by the defendant to address the risks exposed by the accident involving Mr McCormack. Counsel for the prosecutor submitted that the offence dealt with by the Court in 2005 raised a concern that within a period of approximately six months, two serious breaches of the Act had occurred: having regard to that event there was a significant role for specific deterrence in setting an appropriate penalty in this case. Both submissions make important points: it is significant that the defendant is a large employer working in heavy industry and has maintained a very detailed system of safety which has been specifically altered to meet the risks exposed by this incident. From the brief material available to the Court in relation to the 2005 offence, there is insufficient detail to conclude that there is some lingering doubt about the defendant's safety systems that would warrant a much higher emphasis being placed on specific deterrence. I am also unable to accept the defendant's submission that little or no weight was to be given to specific deterrence in this matter. Specific deterrence will therefore form a significant but not elevated role in the setting of an appropriate penalty. 18 There was some debate as to whether the defendant in these proceedings could be considered more culpable in relation to this incident than Mr Petrozzi, the principal of CES, who was prosecuted for a breach of s 8(1) of the Act. Mr Petrozzi pleaded guilty and was given a significantly discounted penalty of $9,000 against a possible maximum penalty of $55,000. Mr Petrozzi had been in business for a number of years, but in a small way, and had no prior convictions. The facts in that case, heard well before the defendant's case came before the Court, are somewhat different to the evidence ultimately received by the Court and counsel for the prosecutor also drew attention to the difference in the charges pressed against Mr Petrozzi although in essence the risks identified were the same. Having regard to all of the material and given the difference in the particulars of the charges and the maximum penalties faced, nevertheless, I am unable to discern any significant difference in the culpability of the two defendants. 19 In relation to subjective factors, there is no guilty plea in these proceedings and therefore the defendant is not entitled to a discount as was available to Mr Petrozzi but the defendant is not to be more heavily penalised because it chose to contest the proceedings. The defendant is to be given credit for its extensive system of safety in existence prior to the accident, and the steps apparently taken promptly following the accident, to address the dangers and risks exposed by Mr McCormack's accident. The defendant has been in operation since mid-1987, employs a large workforce in both New South Wales and throughout Australia and operates in a heavy industry where there is a risk of serious injury. Its record is therefore to be considered overall as a good record and the evidence supports a conclusion that it is a corporate citizen performing charitable works in the communities in which it operates. It was not contested that the defendant co-operated with the investigation conducted by the WorkCover Authority and I accept that it has, through the evidence of Ms McLean, appropriately expressed its concern for the injuries suffered by Mr McCormack and its contrition in being found in breach of the Occupational Health and Safety Act 2000. These matters are to be taken into account in mitigation of the penalty to be finally imposed. ORDERS 20 (i) The defendant is found guilty of a breach of s 8(2) of the Occupational Health and Safety Act 2000 as particularised in matter No IRC 7574 of 2004. (ii) The defendant is fined the sum of $130,000. with half that sum to be paid to the prosecutor by way of moiety. (iii) The defendant is to pay the costs of the prosecutor in a sum agreed or, in the absence of agreement, as ordered by the Court. 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.