Industrial Court of New South Wales CITATION: Inspector Daniel Beavon v Conditionaire International Pty Ltd [2006] NSWIRComm 246 PROSECUTOR: Inspector Daniel Beavon PARTIES: DEFENDANT: Conditionaire International Pty Ltd FILE NUMBER(S): IRC 5888 of 2005 CORAM: Haylen J CATCHWORDS: Occupational Health and Safety Act 2000 - s 8(1) - plea of guilty - casual employment of 16 year old youth - general cleaning duties and assisting tradesmen including operation of machines - work performed on machine press - lack of effective guarding - inadequate supervision and training - inadequate risk assessment - lack of documented safe working method for operation of press - youth loses tips of three fingers while operating press - serious breach - remedial steps easily taken - machine properly guarded after accident - general and specific deterrence considered - substantial subjective factors - defendant long term engaged in hazardous industry without prior convictions - early plea entered - penalty imposed HEARING DATES: 28/07/2006 EXTEMPORE JUDGMENT DATE: 07/28/2006 PROSECUTOR: Mr D O'Neil of counsel SOLICITORS: Moray & Agnew LEGAL REPRESENTATIVES: DEFENDANT: Ms P McDonald of counsel SOLICITORS: Carroll & O'Dea JUDGMENT: - 1 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Haylen J 28 July 2006 Matter No IRC 5888 of 2005 INSPECTOR DANIEL BEAVON v CONDITIONAIRE INTERNATIONAL PTY LTD Prosecution under s 8(1) of the Occupational Health and Safety Act 2000 EX TEMPORE JUDGMENT [2006] NSWIRComm 246 On 12 October 2004, Justin Lowes was a sixteen year old young man performing general cleaning and associated duties as a casual employee for Conditionaire International Pty Limited at its Miranda factory. During the course of the afternoon he was performing work on a press when he suffered quite serious injuries, losing the top of three fingers. The incident was investigated by the WorkCover Authority and in November 2005 proceedings were commenced against the company alleging a breach of s 8(1) of the Occupational Health and Safety Act 2000. The terms of that charge were that there was a failure to ensure the health, safety and welfare at work of its employees, including Justin Lowes. The breach under s 8(1) was particularised in the following terms: (1) The defendant failed to ensure that plant provided for use at the premises, and in particular the punch press, was safe and without risk to health in that: (a) The guarding on the press was inadequate to prevent access to the die area of the press when the press was in operation as there was a gap of approximately forty-two millimetres in the finger guards on the front rise and fall guard; (b) There was approximately a ninety-five millimetre gap at the bottom of the front sliding guard when it was in the down position; (c) The guarding on the press was adjusted in such a way that it allowed access to the die area of the press from the side when the press was in operation; (d) The foot pedal which operated the press was not shrouded; (e) The interlock device which was designed to prevent operation of the press unless the front rise and fall guard was in the closed position could be easily overridden and was in fact overridden; (f) the V-belt drive of the press was not adequately guarded. (2) The defendant failed to ensure that systems of work and the working environment of the employees are safe and without risks to help in that: (a) Employees were required to reach into the die area with their hands to turn pressed items over before they were pressed again; (b) The defendant failed to conduct adequate risk assessments in relation to the press; (c) The defendant failed to conduct audits of its plant to ensure that the guarding of the plant complied with the requirements of AS 4024.1 - 1996 Safeguarding of Machinery - General Principles; (d) The defendant did not have documented safe work methods for the operation of the press. (3) The defendant failed to provide such information, instruction, training and supervision as was necessary to ensure the health and safety of the injured worker whilst he was using the press. (4) The worker sustained serious personal injuries at the site on 12 October 2004 when he reached into the die area of the press. The worker suffered a crush injury to the middle, ring and little fingers of his right hand resulting in a partial amputation of the ends of those fingers when they became caught in a crush point formed by the die of the press. As a result of the incident the worker was conveyed to hospital where he spent three days. When the matter came before the Court it was mentioned twice before a plea of guilty was entered by the company to that charge as particularised. On the hearing of submissions and evidence as to the appropriate sentence, the Court had before it the following documents: 1. An Agreed Statement of Facts with annexures dealing with a workplace check list and the common sense health and safety guidelines used at the company's premises. 2. Factual reports by the WorkCover inspector, the second such report dealing with observations made of this particular piece of equipment when it was in operation. 3 A number of photographs depicting the guarding on the machinery shortly after the incident involving Mr Lowes; pictures of the injuries he received and the new guarding placed around the machinery in response to this incident; 4. Notices served by the WorkCover Authority. There were documents tendered dealing with the company's occupational health and safety policy, a diagram dealing with responsibility for occupational health and safety in relation to the operation of the occupational health and safety committee and a certificate indicating the company had no prior convictions. Also tendered jointly by the parties was a record of interview or a statement taken by the inspector from Mr Owczarek, who had been employed by the company and had showed Justin Lowes on the day of this incident what work was to be performed on the plant in question. I will return to those documents in due course. For the defendant there was an affidavit of Edward Allan Strom which was read. Mr Strom was director and secretary of the defendant. There were a number of annexures attached to that affidavit and they were submitted to the Court. The Agreed Statement of Facts sets out some of the matters I have already dealt with. Justin Lowes had been employed as a casual labourer/trades assistant and he had been employed some four months prior to this particular incident. His hours of work were between 6.30am and 3pm Monday to Thursday and 6.30 to 12.30 on Friday. His usual duties included cleaning the premises and assisting tradesmen as required which included operating machinery. There was some material as to the working hours being adopted to suit the hours of his father who worked at the factory and that matter was also dealt with in Mr Strom's affidavit. On 14 October 2004, Inspector Benbow attended the premises, conducted an inspection of the premises in the company of Mr Strom and made a number of observations that are detailed in the agreed statement of facts. It is sufficient to note consistently with the terms of the particulars of the charge that there were a number of gaps found at the corner of the die and from underneath the guarding and at the side. That guarding was such that it permitted access within the machine to turn over those metal and sometimes plastic parts that were being moulded. It was noted on 14 October that there was a spring on the sliding guard attached to a screw at the top of the guard. The spring could easily be removed by hand and the spring was adjusted by means of a slide attached to a circular rod and secured by a hand turntable screw. Sections of the spring were stretched. When the spring was removed from the front sliding guard the press was able to stroke continuously. It was also noted that the V-belt drive was not fully guarded. The front section of the guard was missing and there were gaps at the bottom of the guard near the motor that allowed access to the V-belt drive. An unguarded crush point existed at the top of the press at the rotating cam section of the stroking mechanism. The waste draw was not secured and when removed the underside of the die was accessible from underneath. The foot pedal was not shrouded. A few days later the Iinspector returned to the premises and conducted an inspection together with directors of the company and Mr Owczarek, the press operator, and observations were made again of the machine in operation and again a number of observations were made about gaps between the guard and the machinery. Similar observations had been made on 14 October although there is some more detail in the later report. It is accepted that on 12 October 2004, Justin Lowes was asked to manufacture fan blades from stainless steel using the press. He had cut stainless steel into lengths and then used the bending function of the press, bent it in one direction and then turned it over and bent it in the other direction. There was some discussion during the course of submission as to the way in which that process was carried out. At approximately 3.00 pm on that day Justin Lowes placed a length of stainless steel in the press and bent it in one direction. As he was reaching into the die area of the press to turn the piece of stainless steel over with his hands, the press stroked and crushed the ends of three fingers of his right hand, as set out in the particulars. He was conveyed to hospital and spent three days there. As a result of the incident he suffered amputation of the fingertips of the middle, ring and little fingers of his right hand. At the time of the incident his supervisor, Mr Owczarek, had left for the day, his usual finishing time being 2pm. Justin Lowes said he had been shown how to use the press by his supervisor approximately one month after he commenced work with the defendant. He had used the press approximately once per week since then. Mr Owczarek had set up the press on this day and demonstrated the task of pressing the fan blades and left the worker alone to complete the task. Justin Lowes said he had not been informed that he should make sure that the spring on the front guard was attached to the rise and fall section of the guard. Following the incident Mr Strom inspected the press and observed that the safety mechanism on the failsafe gate had been disconnected. The press had not been modified by the defendant since its acquisition in April 1977. As a consequence of the inspection by the inspector on 14 October, a prohibition notice was issued to the defendant requiring it to cease operation of the press until all dangerous parts of the press had been securely guarded. Following the issue of that notice in a relatively short period the defendant installed additional guarding to the press. It was agreed that at some time prior to the incident on 12 October 2004, the defendant had completed an undated document entitled "Workplace Inspection Checklist". An item on the list indicated the machine was adequately guarded. Mr Strom said that entry related to all plant at the premises including the press and that it was completed prior to the accident. An independent body conducted an inspection of the premises prior to the incident, I think approximately two weeks beforehand, having been engaged by the defendant but it was said this only related to safety signs within the factory and not guarding issues. There were no documented procedures or safe work methods specifically in relation to the use of the punch press in place prior to the incident. The defendant had in place "Occupational Health and Safety Common Sense Guidelines" which relevantly stated "Ensure machinery guards are correctly set and used at all times." Training was provided by an external body which led to the participants, including the injured worker, being issued with a General Induction for Construction Work in NSW OHS Construction Induction Training Certificate. That course was conducted on 3 September 2004. Justin Lowes had received a certificate as a result of participating in that course. The statement of Mr Owczarek set out how he came to work for the defendant, his experience prior to taking up work there and a description of the work he performed as a fitter. He confirmed that he left work at 2pm on the day and significantly said by reference to a photograph that the punch press was set up in a way in which the guards were fully extended to provide, "what I would regard as the maximum protection". He thought the side guards may have been a bit lower but he had told Justin Lowes that there were a number, perhaps one thousand blades that had to be cut and moulded and he was aware he had worked on the press before and had made stainless steel blades of the same size. On this day Mr Owczarek said he helped Justin Lowes set up the press. It was set up but then adjusted by Mr Owczarek. Mr Owczarek showed him how the press worked and he checked the size of the fan blade and it was correct. He noted the guard was in place and it was as he termed it "correct". The sliding front guard spring was set and he had tried it. It was Mr Owczarek who had shown Justin Lowes the method of pressing the metal twice to overcome problems experienced in the past when the moulding did not work as desired. In relation to Mr Owczarek's operation of this machine he was asked whether the company provided any checklist or documents when setting up the punch press. He noted he had no instructions and "no letters". He had been shown how to perform the work by a previous employee. He said that he had not told Justin Lowes about the special spring attached to the sliding front guard but he had showed him how the machine worked. For the company, Mr Strom gave affidavit evidence and was not required for cross-examination. He referred to the company being incorporated in 1977 and commencing operations from the middle of 1978 in Milperra. He described the company as a small company that designs, manufactures and supplies laboratory fume exhaust equipment, air curtains and industrial steel fans. The business was one involved in the installation and servicing of the products at various off-site locations, and when it commenced its operations in 1977 it employed eight people including four working directors and had gradually grown to today employing thirteen full time employees and one part time employee. The circumstances of Justin Lowes' employment were set out. It is sufficient to say there were representations made by his family. It was suggested in submissions he was young at sixteen to be employed and the company had taken on Justin Lowes in a casual capacity as a favour to a long serving employee, being his father. He was provided with practical training and instruction by a qualified tradesman in the relevant section of the factory where he was assisting. It was noted that there were eight full time employees who were qualified tradesmen and two qualified engineers. There was practical training and instruction arranged and paid for from the external body that Justin Lowes participated in and that occurred on 30 September 2004. In relation to occupational health and safety, Mr Strom spoke of the commitment of the defendant to occupational health and safety, noting its core business was the provision of safety equipment to various industries. He referred to the company's impressive safety record having operated for nearly thirty years in the manufacturing industry with no prior charges or convictions. Reference was made to the documented occupational health and safety policy on the noticeboard and how employees were encouraged to bring their concerns about occupational health and safety to the attention of the factory occupational health and safety representative and other senior members of the company. High vision work clothing was provided by the company to its employees. The defendant had taken steps in 2002 to have an employee complete a TAFE course in relation to electrical equipment so electrical equipment could be safely tagged and maintained. There were material safety data sheets made available to all employees. There was reference to the Occupational Health and Safety Common Sense Guidelines including the company requiring employees to ensure machinery guards were correctly set and used at all times. There was a documented Job Safety Analysis and Safe Work Method statement provided and approved for off-site work and there was reference to a number of significant companies for which that work was performed. Prior to the accident, Mr Strom had conducted regular and ongoing inspections of the site to identify matters that needed attention. It was in the course of that type of inspection that he completed the workplace inspection checklist referred to earlier. The punch press had been used on a daily basis by the company for twenty-seven years without incident. It was estimated to have performed about two million operations during this period and it was guarded. Prior to the incident there was an undocumented safe system of work in relation to the punch press. It required the press to be checked for correct operation and a test run undertaken by a qualified tradesman each time the die was changed. This was said to have occurred two or three times a week. Although it was undocumented it was, nevertheless, Mr Strom's evidence there was an ongoing risk assessment of the press. In August 2004, an external body again conducted an inspection in relation to the signage and there was a safety signage installation checklist. Evidence was also given about the participation by members of the company in the Standards Australia Committee providing technical assistance and how the company had been a foundation member of the Australian Industry Group which had been instrumental in relation to preparing and introducing the Australian Standards regarding safety in the laboratories. The company had been accredited by the National Association of Testing Authorities (NATA) and it was a registered laboratory and it was said that the company was one of the first in Australia to receive and maintain that accreditation. There was a description of how the incident occurred and the work being performed by Justin Lowes on the day. It was explained during submissions that Mr Owczarek attended to other work in close proximity to Justin Lowes until approximately 2.00 pm when he left to go home. There was a description of steps taken by Justin Lowes, the raising of the alarm about his injuries, how an ambulance was called and the understanding of the nature of those injuries. It was said that prior to the incident Justin Lowes was provided with practical training and instruction in relation to the punch press and had used the press on approximately fifteen to twenty occasions and on each occasion he was supervised by Mr Owczarek who was in proximity to the punch press. Prior to the incident, Mr Strom's understanding was that the press was to be operated in the following way:, the operator slid a piece of metal (stainless steel or aluminium) into the die area of the punch press; the operator pulled down the front safety guard which allowed the punch press to be operated; the operator depressed the foot pedal, which caused the metal to be bent into the shape of a fan blade; the front safety guard was raised, which prevented the punch press from being operated and the operator slid the piece of metal from the machine using the next blade to be formed. On the day of this incident, the punch press was guarded and had a failsafe spring mechanism attached to the guard, but unbeknown to Mr Strom, at some time prior to the incident, the spring attached to the safety guard had been disconnected, causing the failsafe mechanism not to operate. It also appeared to him that the fingers of the guard had been adjusted out of their usual alignment which allowed access to the moveable parts of the machine. After the incident there was an inspection of the press and a risk assessment accident report prepared. Also after the incident Mr Strom was informed that the method of work that Justin Lowes had been using involved turning the fan blade over by the operator after it had been pressed and then re-pressed. In his view that was unnecessary. He spoke of cooperating fully with the WorkCover Authority. After the incident there had been a meeting of staff, a report on Justin Lowes' condition and also steps taken to add representatives to the Occupational Health and Safety Committee. There were meetings convened in relation to formal occupational health and safety meetings and a memorandum issued regarding occupational health and safety late in October 2004. By the end of November 2004 safe operating procedures of the press had been produced. Late in November 2004, Justin Lowes returned to work on light duties. There was a meeting about how he would be occupied in his time. He was also given a copy of the Safe Operating Procedure for the brake press and the contents of this document were explained to him. He was also offered permanent full time employment by the company and by 9 December he was available for his pre-injury duties, but by 20 December Justin Lowes had decided to take up other employment, an apprenticeship with a landscape gardener. In November 2004, the company had consulted the Australian Industry Group for assistance. They received some material and on consideration felt it was not the type of assistance they required. By May 2005 the company had engaged the services of an independent risk service company to formalise the Occupational Health and Safety policies and procedures. There has been consideration given to the policy over the time since the incident to the present day. In July 2006, the safe operating procedure for the punch press was reviewed. In relation to the nature of the company Mr Strom said it was a small, tight-knit community. It was an employee oriented company and had striven to ensure a safe and positive work environment. Most of the employees were long term, usually only leaving when they retired. They were paid over the industry average and had overtime when the work did not justify overtime. There was a tolerant approach to the taking of leave and examples were given, as well as the payment of a Christmas bonus every year and maintenance of a separate and dedicated bank account for employees' entitlements in case unforeseen circumstances arose. Details were given of voluntary contributions made to a number of community organisations and Mr Strom was involved in a number of community organisations. There was the expressed contrition that the company had contravened the law and the injury Justin Lowes suffered. The incident had an effect on the company. After twenty-nine years there was the fear that another such incident would occur, despite the company's best efforts to ensure the health and safety of its employees. A decision had been made to try to sell the company but that had not yet been achieved. There were a number of annexures to the affidavit that had been briefly dealt with and some of them in particular were drawn to my attention during the course of the proceedings. In considering the objective seriousness of the offence it is appropriate to note a plea of guilty has been entered by the defendant to a quite comprehensive failure by it. I have already set out the details of those Particulars. There was some discussion about the nature of the injuries and I can accept although serious injury was suffered in the loss of the fingertips on the right hand of Justin Lowes, the type of machinery given the way it operated does not appear to be the type of machinery where amputation of an arm or some other significant body part might occur. So it is in that relative sense one can give consideration to the nature of the risk. There was guarding available. This machine had been used over a number of years. That sometimes induces a false sense of security about the safety of the machine. From the photographs it appears fairly obvious there were gaps, particularly because the guarding itself could be moved and on the Agreed Statement of Facts the safety spring itself could be removed and I accept without a great deal of difficulty: there were fairly simple steps that could be taken to effectively guard the machine and they were ultimately taken and the machine became encased in guarding that would appear to prevent this accident occurring in future. This accident, as it turns out, involved a young person who was quite inexperienced. The plea accepts there was not adequate supervision and there was not adequate instruction. Bearing all of these matters in mind, I conclude that this is a serious offence although that conclusion is reached having regard to the nature of the machine that I have already spoken about. In relation to general and specific deterrence, there is no suggestion that general deterrence should not form a significant part of the penalty and it will do so. As to specific deterrence, it seems to me the sale of the company perhaps in the future or perhaps not, is not a matter I can properly take into account. Here, there is a machine that was guarded but inadequately guarded and steps have now been taken to guard it. I believe having regard to the history of this company that it is unlikely to offend this way again, especially in relation to this particular machine. But it does continue to operate in this industry which has the risks of having employees operate machinery that requires guarding. Specific deterrence therefore will form a part of the penalty but to an extent that will be modified by the considerations I have just mentioned. As to subjective features I accept there was an early plea and I would allow a discount of twenty-five per cent for that factor. It is without doubt this company has a good industrial record. It might be said it has a modest workforce but it has, up until the time of this incident, been working for some twenty-seven years and by the time of the sentencing proceedings, had been in operation for some thirty-odd years in an industry involving the use of machinery that is required to be guarded, noting the risks associated with such work. Its history of being without a prior conviction is therefore to be considered as a good industrial record. The evidence also supports a finding that the defendant is a good corporate citizen both in relation to the way in which it deals with its employees and looks after their welfare in occupational health and safety and by its community participation. I accept it has demonstrated its contrition not only by the evidence of Mr Strom, but the way it treated Justin Lowes and also by the entering of an early plea. Importantly it has cooperated with the WorkCover Authority. Those matters are significant and will be taken into account in mitigation of the penalty. Bearing these matters in mind, the Court makes the following orders: 1. The defendant is found guilty of a breach of s 8(1) of the Occupational Health and Safety Act 2000 as particularised in matter IRC 5888 of 2005 to which it has pleaded guilty. 2. The defendant is fined the sum of $65,000 with half of that amount to be paid to the prosecutor by way of moiety. 3. The defendant is to pay the cost of the prosecutor in the 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.