Industrial Relations Commission New South Wales Medium Neutral Citation: Inspector Farmer v OneSteel Wire Pty Ltd [2011] NSWIRComm 133 Hearing dates: 30 August 2011 Decision date: 31 August 2011 Jurisdiction: Industrial Court of NSW Before: Kavanagh J Decision: 1. In Matter No IRC 1190 of 2010, I find the defendant guilty of the offence as charged. 2. The defendant is fined in the sum of $80,000 with a moiety to WorkCover Authority of New South Wales. 3. There has been no agreement between the parties as to the quantification of costs. I will hear the parties on this issue in the event no agreement can be reached. Leave to re-list at short notice. Catchwords: OCCUPATIONAL HEALTH AND SAFETY - breach of s 8(1) of the Occupational Health and Safety Act 2000 by defendant corporation - early plea of guilty - failure to properly guard dangerous machine - risk to employees working on site - employees accessed working parts of machine through unguarded area - employee lost hand in machine - comprehensive pre-existing safe system of work - significant training of staff - small foreseeable element - general and specific deterrence - remorse shown and contrition expressed - proper steps taken to remedy offence immediately - co-operation with prosecutor - evidence of ongoing commitment to safe working - good corporate citizenship - prior convictions of defendant - maximum penalty - penalty Legislation Cited: Crimes (Sentencing Procedure) Act 1999 (NSW) s 21A Occupational Health and Safety Act 2000 (NSW) s 8(1) Cases Cited: Cahill v State of NSW (Department of Community Services (No 4) [2008] NSWIRComm 201 Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 Inspector Morgenthal v Houghton [2010] NSWIRComm 192 Inspector Rosmund Schuman v BCP Employees Pty Ltd [2011] NSWIRComm 64 Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 Markarian v R [2005] HCA 25; (2005) 215 ALR 213; (2005) 228 CLR 357 Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364 R v Gallagher (1991) 23 NSWLR 220 R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; 115 ACrimR 104 R v Way [2004] NSWCCA 131; (2004) 60 NSWLR 168 Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31 Tyler v Sydney Electricity (1993) 47 IR 1 WorkCover Authority of New South Wales (Inspector Glass) v Kellogg (Aust) Pty Limited (No 1) (1999) 101 IR 239 WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 Category: Principal judgment Parties: Inspector David Farmer (Prosecutor) OneSteel Wire Pty Limited (Defendant) Representation: T Howard of counsel (Prosecutor) P E McDonald SC (Defendant) WorkCover Authority of NSW (Prosecutor) Sparke Helmore Lawyers (Defendant) File Number(s): IRC 1190 of 2010 Judgment 1This prosecution is brought by Inspector David Farmer of the WorkCover Authority of New South Wales ("the prosecutor") against OneSteel Wire Pty Limited ("the defendant" or "OneSteel") under s 8(1) of the Occupational Health and Safety Act 2000 ("the Act") by way of an amended Application for Order. 2It is alleged the defendant, being an employer on 29 October 2008 at Newcastle Wire Mill located at Ingall Street, Mayfield in the State of New South Wales ("the premises"), contravened s 8(1) of the Act in that it failed to: b y its acts or omissions as particularised below, ensure the health, safety and welfare at work of all its employees and in particular, Raymond Edward Cook, contrary to section 8(1) of the Occupational Health and Safety Act 2000. In particular: A. The defendant was an employer. B. The defendant employed Raymond Edward Cook. Particulars of Risk: C. Employees of the defendant were exposed to the following risk to their health and safety: (a) There was a risk that body parts, including the hands, of the defendant's employees and in particular, Raymond Edward Cook, who operated wire drawing machines, including the wire drawing machine known as "WW2" at the premises ( the plant ), would come into contact with and become entangled in the rotating payoff wheel resulting in injuries, including crush or amputation injuries. Particulars of the defendant's failings in relation to plant: D. The defendant failed to ensure that the plant used by the employees, namely the wire drawing machine known as "WW2" was safe and without risks to health in that the defendant failed to guard the north western side of WW2 in the vicinity of the payoff wheel by fencing (whether or not including an interlock gate) in circumstances where employees of the defendant could access the rotating payoff wheel, from the north western side. Measures the defendant should have taken but failed to take: E. The defendant should have ensured that WW2 was adequately guarded on its north western side to prevent access to the plant's rotating payoff wheel (and guide rollers) from that side: (a) by means of fixed guard fencing; and/or (b) by means of otherwise fixed guard fencing with an interlock gate which would cut power to the machine when opened. As a result of the defendant's failures and omissions employees, and in particular, Raymond Edward Cook were placed at risk of injury and the said Raymond Edward Cook in fact suffered injury. 3The defendant pleads guilty to the charge. 4Mr T Howard of counsel appeared for the prosecution and Ms P E McDonald SC appeared for the defendant. The prosecution relied upon an Agreed Statement of Facts with the following annexures: OneSteel drawing No.33089 of proposed storage areas drawn by "JJO" dated 18 may 2001; 32 colour photographs taken by Inspector David Farmer on 29 October 2008 and 31 October 2008 and one colour photograph taken by Inspector Graeme Aldred on 30 January 2009. A Prior Convictions Certificate was also tendered. 5The defendant relied upon an affidavit of Anthony James Duggan and an affidavit of Craig Rodney Ahrens (as amended) each sworn 23 August 2011. 6The Agreed Statement of Facts relevantly reads: Background 3. At all material times, the defendant was engaged in the undertaking of processing steel and manufacturing of wire. As part of that undertaking, the defendant manufactured wire from steel rod at an industrial facility known as the Newcastle Wire Mill, located at Ingall Street, Mayfield in the State of New South Wales ("the premises "). The premises are referred to from time to time, and variously, as the 'Mayfield Wire Mill' and the 'Newcastle Wire Mill'. The department or specific premises in which the incident occurred is referred to from time to time and variously as the "SRPC Department", the "SRPC Plant" and the "SRPC Mill" (the "SRPC Plant"). 4. At all material times, the defendant employed workers at the premises. As at 29 October 2008, the defendant employed about 406 workers at the premises. 5. In 1994, Raymond Edward Cook (DOB 1.10.1973) ("Mr Cook") commenced employment with the defendant, firstly working at the defendant's wire rope works at Mayfield and then later, at the premises. The defendant has been Mr Cook's employer continuously throughout the subsequent period, including as at 28 and 29 October 2008 and as at today, Mr Cook has not returned to his pre-injury duties but has been redeployed by the defendant. 6. As at 28 and 29 October 2008, Mr Cook was working for the defendant as a level 4 Wire Worker at the premises. His duties involved operating heavy wire drawing machines in that part of the premises known as the SRPC Plant. There were three heavy wire drawing machines situated in the SRPC Plant on the premises, known, respectively, as "WWI", "WW2" and "WW3". 7. The layout of the SRPC Plant as at 18 May 2001, including the three heavy wire drawing machines in plan form is depicted in a Onesteel drawing No. 33089 dated 18 May 2001 of proposed storage areas (drawn by "JJO") a copy of which is annexed as Annexure A to this Statement of Facts. As at 29 October 2008, and currently, the heavy wire drawing machines remain in the location depicted in the annexed drawing of 18 May 2001. 8. At the relevant times and now, the heavy wire drawing machines were parallel, orientated lengthwise in a north/south direction with the steel coils loaded from the 'C' hook onto the payoff bed at the northern end of the floor of the SRPC Plant. The coils were pulled in a southerly direction through the machine in the manner described in paragraph 10, which follows. 9. There were floor areas between the heavy wire drawing machines (i.e. a floor area between WW1 and WW2 and a floor area between WW2 and WW3). The floor area between WW1 and WW2 is shown in photo No 4 taken on 29 October 2008 by Inspector Farmer. The floor areas were not designated restricted areas as such, however, only those persons inducted into the SRPC Plant were permitted to use the walkways, unaccompanied, between the heavy wire drawing machines including the floor area between the eastern side of WW1 and the western side of WW2 as shown in the abovementioned Photo No 4. 10. A heavy wire drawing machine processes steel rod, thinning the steel rod into steel wire of a pre-determined thickness. Coils of steel rod are pulled through the machine by a motor which causes the rod to pass from the payoff bed through the guide rollers on the rotating payoff wheel and into a series of blocks which thin the steel to the required thickness. The rotating payoff wheel is not driven by a motor or otherwise rather, it rotates as a function of the rod being pulled through the machine. 11. The coils of steel rod are held together by approximately 3 or 4 tie wires. Examples of tie wires are shown in Photo No. 37 taken on 29 October 2008 by Inspector Farmer. The coils are moved from a holding area via an overhead crane and are placed on the 'C' hook and the operator uses bolt cutters to remove the tie wires. The end of the previously loaded coil of rod is welded to the starting end of the newly loaded coil and the process of loading coils continues in that way and, for that reason, is referred to as 'continuous payoffs'. The coils loaded from the 'C' hook hang in a coiled form on a long stationary rack called the 'payoff bed'. The coil is then pulled through the machine as described in paragraph 10, above. 12. The tie wires, when cut by the operator, usually come away from the coil and are discarded into a scrap metal bin. It is possible for the tie wires to become caught in the coil if the tied coil is not placed correctly on the 'C' hook or for the tie wire to become caught on the 'C' hook itself. Witness accounts vary as to how often the tie wires became caught. Mr Raymond Edward Cook when interviewed said that tie wires became caught 'approximately once per week'. Mr Paul Alexander Mulligan when interviewed said it occurred: 'probably once a day, just occasionally' and Mr Roderick John Shipley said: 'I don't believe it is a daily occurrence.' It is also possible for the cut tie wire to become caught depending on how the coil has been strapped up. This occasionally happened. 13. Each coil of steel rod loaded on to the heavy wire drawing machines is identified by a number affixed to an identification tag, sometimes referred to as a 'tag'. The identification tag is attached to one of the tie wires on each steel coil. The tags are either metal or plastic. The number on the identification tag enables the particular rod coil to be identified, including for the purposes of quality control. Part of an identification tag affixed to a steel coil is shown in Photo No. 37 taken on 29 October 2008 by Inspector Farmer, being the tag partly visible on the inside of the coil and attached to one of the tie wires. 14. At the relevant times and now, the heavy wire drawing machines were used to manufacture wire which is used for strand feed operation. However, from time to time they were also used to manufacture single strand rope wire. Once the rope wire has been processed through the heavy wire drawing machines, the rope wire is transported to the defendant's wire rope works at Mayfield where the rope wire is wound into intertwined strands of steel creating a structure resembling a traditional rope. 15. WW2 was the machine normally used to manufacture the single strand rope wire described in paragraph 12. 16. Each wire drawing machine has a 'working side', being the side designed for principle access by operators to the working parts of the machine when required. 17. As at 28 and 29 October 2008, the 'working side' of each of the heavy wire drawing machines adjacent to the operator's console was guarded (i.e. fenced off) with an interlock gate located at the northern end of the machine. If any of these interlock gates was opened, this would cause the subject machine to automatically stop. 18. The eastern side of WW2 was the 'working side' of that machine and was fenced off with an interlock gate. If the gate on the eastern side of WW2 was opened, the machine would automatically stop. The operator's control station for WW2 is shown in Photograph No 18 dated 29 October 2008 taken by Inspector David Farmer. 19. There was an operator's workstation adjacent to the interlock gate on the eastern side of WW2. Adjacent to that operator's workstation was where an isolation matrix for WW1, WW2 and WW3 was displayed, as shown in Photograph No 38 dated 29 October 2008 taken by Inspector Farmer. 20. As at 28 and 29 October 2008, access to the payoff bed and wheel from the north western side of WW2 was partially impeded by a blue steel panel measuring 1070 mm wide and 1820 mm high. This was erected on the western side of the payoff bed and wheel. An electrical control panel was attached to the outside of the blue steel panel. There was approximately 450 mm between the payoff bed and the blue steel panel. On the outside of the blue steel panel was a yellow waist height bollard. The distance between the yellow bollard and the blue steel panel was approximately 393mm. It was possible for an operator to access the rotating payoff wheel from the north western side while the machine was still in operation by intentionally moving between the yellow bollard and the blue steel panel and then between the blue steel panel and the payoff bed. The Incident 21. On 29 October 2008, at about 5:30am, an incident occurred when Mr Cook was operating WW2 ("the incident "). 22. Mr Cook commenced his shift at approximately 10:15pm on 28 October 2008. Mr Cook was operating WW2. Mr Cook was undertaking a strand job at the time of the incident. 23. Mr Cook was wearing long sleeved shirt and pants, hearing and eye protection, a hard hat and leather gloves. After completing a weld between the rod loaded on the 'C' hook and the rod on the payoff bed he was observed in the area between the payoff bed and the blue steel panel. Mr Cook's right glove and/or hand became entangled on the guide roller which is located on the rotating payoff wheel of WW2 and was severed. It was retrieved and later surgically re-attached. 24. Neither party has been able to establish the reason why Mr Cook accessed the area between the payoff bed and the blue steel panel on the north western side of WW2. The parties have assessed the most likely reasons for Mr Cook accessing the area between the payoff bed and the blue steel panel on the north western side of WW2 as: (a) to remove a tie which had been caught on the coil rod loaded onto the payoff bed; or (b) to retrieve a tag on the floor beneath the payoff bed and the payoff wheel. The said electrical control panel and the blue steel panel are depicted in Photograph Nos 27 and 28 taken by Inspector Farmer on 29 October 2008. 25. According to Mr Paul Alexander Mulligan (co-worker of Mr Cook) when interviewed, he said at the time of the incident, he was standing at WW1 and more specifically, five or six paces away to the left of grid reference A8 in Photo No. 23 taken by Inspector David Farmer on 29 October 2008. Whilst standing in this position, according to Mr Mulligan, he saw Mr Cook "being lifted to the top of the rod by the machine", then Mr Cook's "body shook" and then "his glove kept going around the machine and his body went down the side where he was lifted", which was to the north western side of WW2 in the vicinity of the payoff wheel. 26. Mr Jeffrey James Ganter was Mr Cook's supervisor on the shift of 28 to 29 October 2008. He and Mr Paul Alexander Mulligan, a co-worker of Mr Cook's who was also on shift at the time, rendered first aid and assistance to Mr Cook immediately following the incident. 27. Following the incident, WW2 was immediately stopped and isolated. A tie wire was seen tangled in the coils of the steel rod on the western side of the payoff wheel as shown in Photograph Nos 11, 12 and 13 taken by Inspector Farmer on 29 October 2008. There were also a number of identification tags on the floor on the north western side of the payoff wheel which are visible in Photograph No 31 taken by Inspector Farmer on 29 October 2008. Systems Prior to incident 28. The defendant had operating procedures in place for access to the heavy wire drawing machines, including an 'isolation matrix' which was displayed adjacent to the central operator's workstation between WW1 and WW2. The isolation matrix included instructions regarding the removal of entangled tie wire. Whilst the method and degree of isolation depended on whether the tangle was simple or complex, the isolation matrix required some form of isolation which would result in the stopping of the machine prior to it being accessed. The defendant has Standard Operating Procedures in place for the operation of the Heavy Wire Drawing machines which included a safe instruction for the loading of coils onto the 'C' hook and then from the 'C' hook to the payoff and for the removal of tie wires prior to the commencement of welding. The Safety Clearance for the operation of the Heavy Wire Drawing Machines included an isolation procedure for the removal of tangles of feed at the payoff. 29. Heavy wire drawing machine operators, including Mr Cook, had been trained in the above mentioned operating and isolation procedures. 30. Mr Cook was trained in the procedures for removing simple and complex tangles from the heavy wire drawing machines, including opening the interlock gate on the eastern side before accessing the machine. Mr Cook received refresher training in these isolation procedures in June 2007 and was assessed as competent. Mr Cook considered that a caught tie wire was a simple tangle. In accordance with the isolation procedure, Mr Cook was required to isolate WW2 prior to accessing the machine. 31. In order to remove a simple tangle at the payoff, such as a tangled tie wire, the operator was required to open the interlock gate on the north eastern side of the machine, which would automatically shut the machine down. If a tangle was complex, additional steps were required, including isolating the machine and affixing a personal padlock to secure the electricity supply switch in the off position. 32. The north western side of the WW2 machine had an unguarded gap of approximately 450mm between the payoff bed and the blue steel panel which formed the backing for an electrical control panel. There was no guarding, such as fixed barriers or fencing, an interlock gate or a light curtain on the north western side of the machine to physically prevent operators intentionally moving into this gap and coming into contact with the rotating payoff wheel. 33. It was possible to 'inch' the machine to attempt to reposition a tangled tie wire so that it was accessible from the eastern side of the WW2 where the interlock gate is. Neither party has been able to establish whether Mr Cook attempted to inch the machine. On the day of the incident, a tie wire was caught on the southern end of the western side of the payoff bed as is evident from Photograph Nos 31, 32 and 33. 34. As at 28 and 29 October 2008, when a heavy wire drawing machine (usually WW2) was used to manufacture rope wire, operators were instructed to record the identification number displayed on the identification tag of each steel coil loaded onto the machine, for quality control measures, so that the rod coils from which the wire rope product was drawn could be identified. There was no requirement for operators to record the identification number for strand feed operations. 35. At that time, in order to enable the identification number to be recorded, operators, after cutting the tie wire on a coil, would sit the identification tag on top of the coil on the payoff bed. In this way operators were able to record which coil was going into the machine. 36. It was possible for an identification tag which had been placed on the top of the coil on the payoff bed to fall onto the floor. According to Mr Cook when interviewed, if it fell on the western side of WW2, he would enter the area on the north western side of WW2 between the rotating payoff wheel and the blue steel panel which housed the electrical control panel to retrieve the tag, whilst the machine was running and without following the isolation procedures. He did this in order to record the number of the rod tags for rope jobs. According to Mr Cook when interviewed, his practice of doing this occurred at varying degrees of frequency sometimes between 2, 3 or 4 times a shift depending on whether the tag slipped around to the western side and during a rope job on WW2. 37. According to Mr Mulligan, when interviewed, operators would access the north western side of the payoff bed of WW2 'only very rarely' 'only to remove trapped tie wires on rare occasions' after the machine was isolated. In relation to operators accessing the WW2 machine whilst the machine was running and without following isolation procedures, according to (a) Mr Mulligan, when interviewed, he said he had not seen other operators accessing the restricted areas without following the appropriate safe work procedures; and (b) Mr Ganter, when interviewed, said he had not seen workers accessing areas without complying with the safety isolation procedures. According to Mr Shipley when interviewed, he said he had not seen anyone access the payoff bed and payoff wheel from the north western corner of WW2. 38. Detailed risk assessments were done in 2003 and 2007 on the machines and the accessing to the western side was not identified as a risk because it was understood that people did not access from that side and used the eastern side interlock guarding to access the machine. Systems Following 39. Following the incident, WorkCover issued the defendant with Improvement Notice 7169424 in relation to the installation of guarding on the western side of the heavy wire drawing machines. Improvement Notice 7-169435 was also issued to the defendant in relation to reviewing the safe operating procedures for the removal of blockages from the heavy wire drawing machines. All improvement notices issued were complied with by the defendant. 40. Immediately following the incident, the defendant stopped the heavy wire drawing machines for 3 days, a total of 9 shifts and conducted a risk assessment. Counselling was provided to all employees in the SRPC Department and counselling was offered to all wire employees. 41. Following the incident, the isolation matrix was slightly amended to remove any ambiguity regarding the procedure for removing simple or complex tangles and the isolation level required for them. Operators were retrained in relation to dealing with tangled tie wires and accessing the heavy wire drawing machines via the interlock gate on the eastern side of the machines. 42. Following the incident, wire mesh fencing was installed around the payoff bed and wheel at the north western corner of each of the three heavy wire drawing machines which was not the 'working side', including on WW 2. Yellow steel barriers were installed on the eastern side of the middle west side support stanchion of the payoff bed. This fencing physically prevents any operator from being able to access the rotating pay off wheel of WW2 from its north western side. Initially, immediately after the incident, temporary fencing was put in place around the payoff bed and wheel at the north western side of WW 2 as shown in Photograph No 39 taken on 31 October 2008 by Inspector Farmer. Subsequently, permanent fencing was installed as shown in Photograph No 1A taken by Inspector Graeme Aldred on 30 January 2009 (10.34 am). The defendant consulted its employees for comment on the modifications before they became permanent. 43. Following the incident, a hook was installed near the interlock gate on WW2 so that rod tags could be hung on the hook rather than placed on the top of the coil on the payoff bed. 44. The defendant cooperated, at all times, with WorkCover during the investigation. The defendant has and continues to provide support to Mr Cook and he remains gainfully employed by the defendant. Relevant Principles 7In considering penalty, I take guidance from the reasoning of the High Court in Markarian v R [2005] HCA 25; (2005) 215 ALR 213; (2005) 228 CLR 357 and their Honours' view that the task of sentencing must acknowledge the effect of the applicable legislative provisions (in this case s 8(1) of the Occupational Health and Safety Act 2000 with ss 21A, 22, 23 and 34 of the Crimes (Sentencing Procedure) Act 1999). The court, using the "instinctive synthesis" approach, would include an assessment of the objective and individual subjective factors, with the appropriate weight given to each factor, and could (but not should) give a degree of deduction in penalty to some element in the consideration in such circumstances as where it better serves the interests of transparency, which element should be narrowly confined (for example, the utilitarian value of the plea). 8Their Honours recognised the "instinctive synthesis" approach to sentencing gives rise to an inevitable tension between the need for transparency and adequate reasoning on the one hand, and the need to avoid a mathematical approach pursuant to which the sentencing court engages in a "staged sentencing process" starting at the maximum penalty and then making deductions from it without adequately assessing (even in a provisional way) the sentence called for by the objective facts (see Markarian at [32]). 9Spigelman CJ in R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383; (2000) 115 A Crim R 104 , correctly, given the consideration in Markarian , recognised this "instinctive synthesis" approach to sentencing saying at [57]: The instinctive synthesis approach is the correct general approach to sentencing. This does not, however, necessarily mean that there is no element which can be taken out and treated separately, although such elements ought be few in number and narrowly confined. As long as they are such, their separate treatment will not compromise the intuitive or instinctive character of the sentencing process considered as a whole. 10Proper regard is to be had to express legislative provisions and to the relevant statutory regime ( Markarian at [27]). The object of the Act is to protect employees from risks to safety, health and welfare whilst compelling attention to occupational health and safety issues so that persons are not exposed to risk to their health and safety at the workplace. 11In Inspector Morgenthal v Houghton [2010] NSWIRComm 192, the Court observed at [9]: In R v Way (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act ...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." 12Of relevance particularly is the effect of s 21A of the Crimes (Sentencing Procedure) Act 1999. Section 21A sets out factors that the court is to take into account in any sentencing hearing and states, inter alia : 21A Aggravating, mitigating and other factors in sentencing (1) General ... (2) Aggravating factors ... (d) the offender has a record of previous convictions, ... (g) the injury, emotional harm, loss or damage caused by the offence was substantial, ... (3) Mitigating factors ... (e) the offender does not have any record (or an significant record) of previous convictions, ... (g) the offender is unlikely to re-offend, ... (k) a plea of guilty by the offender (as provided by section 22) (l) the degree of pre-trial disclosure by the defence (as provided by section 22A), (m) assistance by the offender to law enforcement authorities (as provided by section 23) ... Consideration 13In a consideration as to penalty, the Court first assesses the objective seriousness of the offence as charged: Lawrenson Diecasting Pty Ltd v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 464 (at 474): 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" ... And in Morrison v Powercoal Pty Limited [2003] NSWIRComm 416; (2003) 130 IR 364 at [32]: In assessing the gravity of the offence the focus, therefore, must be on the risk and, viewing it objectively, the seriousness of the act or omission that gave rise to the risk. In other words, the consequence of an accident will not, of itself dictate the seriousness of the offence or the amount of penalty. However, the occurrence of death or serious injury may well manifest the degree of seriousness of the risk to health and safety to which persons may have been subjected ... 14The defendant has pleaded guilty to a charge under s 8(1) of the Occupational Health and Safety Act 2000 related to the risk to safety it exposed to Raymond Edward Cook on 29 October 2008 at the Newcastle Wire Mill. The defendant failed to guard the north-western side of a wire drawing machine ("the WW2" or "the machine") in the vicinity of the payoff wing with fencing (whether or not it included an interlock gate). Given the failure to guard, employees of the defendant could access the rotating payoff wing from the north-western side of the machine. The defendant should have, but failed to, fix guard fencing on the north-western side of the WW2 and/or failed to include in the fencing an interlocking gate (which would cut power to the machine when opened). 15The wire drawing machines are over 33 metres in length. It is important to note that there is a working side of the machine. That side is fully guarded with an interlocking gate. Outside the guard area is an operator's console and a printed operator's matrix. 16Mr Cook was an experienced wire employee who was operating the WW2 during the night shift on 29 October 2008. Towards the end of his shift, at approximately 5.30 am, Mr Cook entered the accessible area on the north-western side of the machine on a point near the rotating payoff wing. Mr Cook's right hand glove became entangled in the moving parts of the machine and his right hand was severed. 17If any adjustment needed to be made to the machine, the system in place required the machine itself to be isolated (that is, turned off) and there was an isolation code for turning off the machine. Mr Cook and the other machine operators had received training in those procedures, including refresher re-training courses which were conducted for operators every two years. I have sighted a significant training programme undergone by Mr Cook over his long years working with the company. The records identified he had been trained and re-trained in the isolation matrix and the isolation training system. 18Mr Cook was also trained in the operation of the WW2, which included safety clearance procedures. Some of the recognised problems in relation to the operation of the machine were acknowledged in the safe work procedures. When the machine was used in the rope capacity, tags needed to be tied to bundles, which tags sometimes came off and fell under the machine. When the machine was used in the single-strand wire production, sometimes tie wires came loose and fell off. If either the tags or ties fell off the lines and needed to be recovered, a clear safe work procedure for stopping the WW2 needed to be followed. 19Mr Cook, after the incident, revealed he accessed the machine through the unguarded north-western corner while it was working. He did not reveal why. Another employee said he had seen other operators, not daily but often weekly, go to the machine through the unguarded area. A supervisor stated he had not seen operators using such access. The defendant contended Mr Cook was the only operator who accessed the area through the north-western opening. I do not accept this proposition. It was known by employees there was access to the machine from the north-western corner. 20In considering the objective seriousness of the offence, the defendant submitted evidence reveals that access by an operator to the rotating payoff wing, from the north-western side of the machine when it was in operation, was intentional conduct in contravention of the isolation matrix and the pre-existing safe operating procedures. The defendant contends Mr Cook was regularly trained in the proper procedure which required, before access, the machine be stopped (that is, isolated). Such access by Mr Cook to the machine while not isolated was in contravention of the safe work procedure. The defendant submits the Court should be persuaded that evidence of the contravention of a safe work procedure by a well trained employee should mitigate against the seriousness of the offence. 21However, the difficulty I have with the latter proposition is the evidence (from the photographs taken on the day of the incident) indicates the machine was operating in the production of single-strand wire and a tie wire was caught in the wheel of the machine. I have no difficulty in inferring Mr Cook was attempting to remove a tie wire when his hand was caught and de-gloved. 22The prosecution is directed to the failure of the defendant to guard the north-western side of the WW2 in the vicinity of the payoff wing. The charge is directly "a failure to guard". While the evidence persuades there were significant safe systems of work in place, which required the WW2 to be isolated before access, and there was significant training of this employee, the breach is a failure to guard. In that circumstance, the words of Walton J, Vice-President, in WorkCover Authority of New South Wales (Inspector Glass) v Kellogg (Aust) Pty Limited (No 1) (1999) 101 IR 239 (at 257) are apposite: ... the mere stipulation of procedures and instructions to carry out the work may not be enough to satisfy the requirements of s 15(1) of the Act. The employer should ensure that procedures and instructions are actively and positively complied with by employees. His Honour further state (at 257): ... 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 be given to employees; an employer must also ensure that those instructions are carried out. 23In this case the focus of the offence is on the failure to properly guard the machine. 24As Bauer J observed in WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Ltd (1995) 100 IR 248 (at 257): 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. (This observation was also referred to by the Full Bench in Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31 at [15]). 25While I accept Mr Cook stepped out of the boundaries of the safe work procedures and the isolation matrix, this was an unguarded machine to which he had access. Mr Cook admitted he knew of that access and he had used it before. He used it again on the relevant date. At least two employees knew of this access. The defendant accepted that the existence of an unguarded machine provides evidence there is a foreseeable element to the offence. 26The principle of foreseeability is a factor in determining the objective seriousness of an offence. This was considered and affirmed by the Full Bench in Capral Aluminium Ltd v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610. On the issue of foreseeability, the Full Bench in Capral stated at [82]: 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. 27I do not, in the circumstances, accept foreseeability is a significant element of the offence. Whilst some employees knew of the access, I am satisfied that access was not recognised by the employer and the employer did not have knowledge that employees were using that access. 28The area of access was not guarded but there were stanchions along it and access to the moving part of the machine was in a tight area behind a console. There shall be a small element of foreseeability to the offence. 29The gravity of the potential risk flowing from a breach is relevant as a measure of gravity of the breach and the culpability of the defendants ( Lawrenson Diecasting (at 474)). The potential risk of significant injury or death was not a remote possibility. There was a high risk to the safety of any employee at work able to access the working part of a machine, especially, in this case, the fly wheel of a wire drawing machine. The words of Hill J in Tyler v Sydney Electricity (1993) 47 IR 1 at (5) I find apposite: The gravity of the damage or injury actually resulting from the breach does not, of itself, dictate the amount of penalty. However, the gravity or otherwise of the potential risk flowing from the breach and its foreseeability are clearly relevant ... 30The potential risk of significant injury or death was not a remote possibility and it became a reality when Mr Cook accessed the wheel (by inference to remove the tie wire caught in the fly wheel) and lost his right hand in the machine. However, I accept it was because of the defendant's comprehensive occupational health and safety systems and the quick reaction of this work force that the severed hand was retrieved, iced and flown with Mr Cook to receive medical attention and has been re-attached with some success. Given the time that has elapsed, I am told Mr Cook enjoys some limited movement of the hand. Importantly, he has been able to return to work on restricted duties and is attempting to advance to full-time work as a forklift driver. The injury in this case is reflective of the potential risk which became a reality with all its serious consequences. 31The principles of general and specific deterrence are also relevant in sentencing considerations. The approach to be taken has been considered in some detail in Capral at [71] - [77]. Each approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench at [74]: ... both 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 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. 32The defendant continues to operate in the manufacturing of wire products. There shall be an element of specific deterrence in penalty with an acknowledgment there was, before the incident, an awareness of the necessity for an employer to have safe working procedures in place. All tasks held by the defendant have been further reviewed since the incident. 33As to general deterrence, the Court recently held in Inspector Rosmund Schuman v BCP Employees Pty Ltd [2011] NSWIRComm 64 at [30]: The nature of the risk to which (Mr Cook) was exposed is one that has been problematic in occupational health and safety terms since the inception of the industrial revolution and has been acknowledged by the legislature of New South Wales since proclamation of the Factories Shops and Industries Act in 1896. . . . By 1912, that Act gave limited safety protection to employees and, a later legislative reform through the Factories, Shops and Industries Act 1962, made clear the employer's obligation to guard the machinery it used in its production. The risk was of a person coming into contact with an operating piece of machinery where the dangerous part of the machinery is not guarded. Apposite is the view expressed by the Full Bench in WorkCover Authority of NSW ( Inspector Lai ) v Rexma Pty Ltd [2008] NSWIRComm 78; (2008) 172 IR 210: [49] The need for the application of the principle of deterrence in the sentencing process cannot be underestimated here. The offences reveal yet another serious incident involving unguarded machinery where the risk to safety, although obvious, was ignored. We adopt the observations of Walton J, Vice-President, in WorkCover Authority of New South Wales (Inspector Ankucic) v Crown in the Right of the State of New South Wales (Department of Education and Training) (2002) 112 IR 1 concerning the importance of the principle when considering the objective seriousness of offences involving unguarded machinery: [41] . . . It scarcely needs to be said that the presence of unguarded machinery constitutes one of the most pernicious and infamous dangers to the health and safety of persons in the workplace. It is this very type of danger that prompted persistent and ongoing legislative attempts by governments to compel the correction of such obvious and serious faults in the systems and plant employed in the operations of employers: see WorkCover Authority (NSW) v Waugh (1995) 59 IR 89 at 100 and Department of Mineral Resources (NSW) (Chief Inspector Terry) v A M Hoipo & Sons Pty Ltd (1999) 99 IR 137 at par 53. [42] The dangers presented by an unguarded saw are well known and management at all levels should be vigilant to ensure that unguarded machinery is not used . . . 34Employers must rigorously review even the most basic elements of their operations. Here there was but one section of a machine not guarded, but that small section allowed access to the dangerous working parts of the machine. The employer "missed" identifying the unguarded access point to this dangerous machine. By having isolation procedures in place and only allowing gate access, it is clear the defendant recognised the machinery was dangerous. It overlooked this access point. A reminder must be issued generally to all employers to review their procedures and their basic assessments as to the guarding of machinery with moving parts. 35It is also necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A(1) of the Crimes (Sentencing Procedure) Act 1999 relevant to the defendants. As was said in R v Way [2004] NSWCCA 131; (2004) 60 NSWLR 168 at [56]: ... it 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) Ultimately, all of the above factors must be considered as part of "a complex of inter-related considerations" ( R v Gallagher (1991) 23 NSWLR 220 (at 228)). 36The subjective elements of this offence favour the defendant. The defendant's submissions were endorsed in most areas by the prosecution. The defendant entered a plea at the earliest possible stage in the proceedings. The defendant co-operated with the WorkCover Authority. 37Further, the defendant had in place a pre-existing safe system for working; one which was comprehensive and also particular. There was in place a safe working procedure related to the operation of the WW2. The corporation continued to endorse safety values on site. In his affidavit, Mr Ahrens, the manufacturing manager of the Newcastle Wire Mill, outlined the various safety measures which were regularly undertaken at the premises, including: tool box talks at the beginning of each shift; the keeping of supervisor's shift logs, safety meetings were conducted with employees every quarter; meetings within the plant (which included production managers, maintenance managers and the manufacturing manager) in which the safety observations of the manufacturing manager were addressed and conducted every month; adherence to a 'Safety Master Plan'. The manufacturing manager ensured he would spend at least 70 percent of his time in and around the plant. There was also a "Raise the Bar" safety campaign conducted to encourage operation and maintenance employees to recognise the importance of isolating moving machinery before conducting work. Responsibilities of employees on site are identified by uniform, which reinforces their role, and work permits for each job are issued. 38I accept this was a comprehensive safe working programme which placed emphasis on the training and refresher training of all operators, staff and managers. As has already been stated, a basic review by the defendant of its machinery was required to identify the risk. 39I am further persuaded, through the affidavit evidence of Mr Duggan, a general manager of OneSteel Wire, that, as for community involvement, the defendant corporation has an excellent record. The corporation employs some 350 employees in the Newcastle area. Although the workforce is predominantly male, it supports research foundations and school activities and, importantly, provides apprenticeships, cadetships, undergraduate and graduate support. Importantly, it has supported the TAFE programme, guiding students from high school into apprenticeships. This has again endorsed its commitment to local area employment. 40The corporation provides, in the region, vital employment. Recent good news is the area is booming. One hopes that could be reflected in the expansion of this business. 41In Cahill v State of NSW (Department of Community Services) (No 4) [2008] NSWIRComm 201, Boland J (President of the Industrial Court of New South Wales) said at [62]: A simple expression of contrition or remorse by a representative of a corporate offender, no matter how senior the representative, is not enough to enable the Court to find that the offender is remorseful: As Cummins J said in DPP v Esso Australia Pty Ltd [2001] VSC 263; (2001) 124 A Crim R 200, "personal expressions of remorse need to be translated into reality". See also see Regina v Heip Tan Nguyen [2004] NSWCCA 438 per Bell J (Hidden and James JJ agreeing) at [21]. There must be evidence that the offender has accepted responsibility for its actions and also that the offender has acknowledged any injury, loss or damage caused by its actions or that it has made reparation for such injury, loss or damage (or both). Section 21A(3)(i) of the Crimes (Sentencing Procedure) Act 1999 provides " remorse " may be taken into account as a mitigating fact if, and only if: . . . (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both) . . . 42I accept Mr Duggan's evidence and expression of remorse in relation to his admission that there was "a failure in our duty to keep Mr Cook safe while at work." Importantly, I accept, on the evidence, the proper expression of contrition has been made by the corporation through the care it has provided to Mr Cook from the moment of his injury. I accept that every possible support was provided to Mr Cook to assist him to recover the use of his right hand. The defendant is to be credited for these endeavours. 43Mr Cook was transported straight to Sydney for medical care following the incident. His parents were accompanied to Sydney by a member of the corporation. They were accompanied at his bedside for a period of time by senior members of the corporation's management. The work site was immediately sealed off and the defendant did its own assessment of the incident. The machine is now fully guarded and fenced. Access, if there needs to be, will be only past the isolation box and matrix which will, in itself, serve to remind that the machine must be stopped. No gate opens until the isolation procedures are followed. OneSteel's reaction to the breach confirms the procedures now in place to address the incident are in good order. I accept unreservedly there have been appropriate expressions of contrition and remorse. 44Further, Mr Cook has been performing restricted duties and his salary level of machine operator has been maintained. I am told this young man (39 years of age) has some family financial commitments and he is able to continue to meet them because his salary has been maintained. 45I take into account the industrial record of the corporation. The defendant has been operating for some 90 years and the corporation's industrial record (in its various corporate identities) has been fairly put before the Court. There have been three prosecutions. Perhaps one incident in 1999, a prosecution brought under s 15(1) of the relevant Act, may have been serious. Two other prosecutions were filed before the Industrial Magistrate, which fact reflects that the appropriate prosecuting authority did not consider them as major breaches of occupational health and safety legislation. Given the long history of this company, which has operated with the use of dangerous machinery on a daily basis over 90 years, its industrial record is not a bad industrial record. The maximum penalty for this offence, given the prior beaches of occupational health and safety legislation, is $825,000. 46I take into account those facts above in mitigation as to penalty but comment that legal authority requires the Court to ensure penalty reflects the objective seriousness of the offence. 47I find the defendant, OneSteel Wire Pty Limited, guilty of the offence as charged. The defendant is fined in the sum of $80,000 with a moiety to the WorkCover Authority. 48The defendant shall pay the prosecutor's costs as agreed or assessed with leave to re-list if there is no agreement. Orders 49The Court makes the following orders: 1. In Matter No IRC 1190 of 2010, I find the defendant guilty of the offence as charged. 2. The defendant is fined in the sum of $80,000 with a moiety to WorkCover Authority of New South Wales. 3. There has been no agreement between the parties as to the quantification of costs. I will hear the parties on this issue in the event no agreement can be reached. Leave to re-list at short notice. 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. Decision last updated: 05 October 2011