Industrial Relations Commission New South Wales Medium Neutral Citation: Inspector Pile v O'Connor Capital Pty Ltd (formerly MPH Rural Pty Ltd) [2011] NSWIRComm 138 Hearing dates: 11 October 2011 Decision date: 17 October 2011 Jurisdiction: Industrial Court of NSW Before: Boland J, President Decision: (1) The defendant is convicted of the offence. (2) The defendant is fined the sum of $100,000 with a moiety to the prosecutor. (3) The defendant shall pay the prosecutor's costs as agreed or as assessed. Failing agreement, costs may be referred to the Registrar for assessment. Catchwords: OCCUPATIONAL HEALTH AND SAFETY - Prosecution of employer for contravention of s 8(1) of Occupational Health and Safety Act 2000 - Fall from height - Serious injuries - Plea of guilty - Sentencing - Objective and subjective factors considered - Penalty imposed Legislation Cited: Crimes (Sentencing Procedure) Act 1999 Occupational Health and Safety Act 2000 Occupational Health and Safety Regulation 2001 Cases Cited: Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 Genner Constructions Pty Ltd v WorkCover Authority of New South Wales (Inspector Guillarte) [2001] NSWIRComm 267; (2001) 110 IR 57 Category: Principal judgment Parties: Inspector Keven Pile (Prosecutor) O'Connor Capital Pty Ltd (formerly MPH Rural Pty Ltd) (Defendant) Representation: Mr D O'Neill of counsel (Prosecutor) Mr M Cahill of counsel (Defendant) DLA Piper Australia (Prosecutor) Bartier Perry Solicitors (Defendant) File Number(s): IRC 1223 of 2010 Judgment 1O'Connor Capital Pty Ltd (formerly MPH Rural Pty Ltd) ("the defendant") was prosecuted by Inspector Keven Pile of the WorkCover Authority of New South Wales for contravention of s 8(1) of the Occupational Health and Safety Act 2000 ("the Act"). 2The prosecution arose out of an incident that occurred on 6 November 2008 at Gilgandra. Lee Jonathan Walsh, an employee of the defendant, fell seven metres to the ground from the top of a grain storage silo. Mr Walsh sustained the following injuries: laceration on left shin, front tooth knocked out, T1 Vertebra fracture, fractured left wrist, compound dislocation of left elbow, fracture/dislocation of right hip and some bone chipping in the socket. Mr Walsh also suffered psychological injury. The charges 3It was alleged in the amended charge that by its acts or omissions the defendant failed to ensure the health, safety and welfare at work of all the defendant's employees, and in particular, Lee Jonathan Walsh, contrary to s 8(1) of the Act. The charge provided particulars of the risk as follows: Mr Walsh was at risk of: 1. Falling from the roof of the silo to the ground. 2. Falling from height whilst being lifted, suspended or lowered by the gantry/monorail crane. 3. Striking, colliding or being caught with or on pieces of plant, including the silo, obstructions on the silo, the roof protrusion of the silo, the hook of the gantry/monorail crane and a silo ring on the ground near the silo. 4The particulars of the defendant's acts and omissions were expressed in the following terms: 1. The Defendant was at all material times an employer; 2. The Defendant failed to ensure that the system of work followed by employees for constructing silos was safe and without risk to health in that the Defendant failed to: (i) Ensure that Mr Walsh was not lifted, suspended or lowered by a gantry/monorail crane by means of a crane hook connected to a D-ring on a harness worn by Mr Walsh; (ii) Ensure that Mr Walsh was not lifted in contravention of Clause 142(3)(d) of the Occupational Health & Safety Regulation 2001; (iii) Ensure that Mr Walsh only performed work at heights in compliance with clause 56 of the Occupational Health & Safety Regulation 2001; (iv) Reschedule work until ladders could be installed to the silo; 3. The Defendant failed to ensure such safe system of work by: (i) Failing to inform and instruct employees that they were not to change the existent safe work systems for constructing silos so as to prevent them from changing the existent safe work system; (ii) Allowing work methods such as the unsafe lifting method used by Mr Walsh to be developed by informal consultation with employees not qualified to make these decisions; (iii) Failing to retain a person qualified and experienced in relation to lifting techniques and lifting equipment to develop a safe work method before changing the existent safe work system for accessing the top of the silos; (iv) Failing to ensure that employees were properly trained in and understood height safety issues and issues associated with using plant to lift people so that employees would not adopt a system of work whereby Mr Walsh was lifted by a gantry/monorail crane by means of a crane hook connected to a D-ring on a harness worn by Mr Walsh; (v) Failing to provide Mr Walsh with a supervisor who was suitably qualified to: a. manage occupational health and safety; b. manage issues in relation to working at height; c. manage issues in relation to use of plant to lift workers; 4. As a result of the Defendant's failures, Mr Walsh was exposed to risk of injury and was injured; 5The defendant pleaded guilty to the amended charge. Agreed facts 6A Statement of Agreed Facts was tendered. The Statement indicated that the defendant was a corporation that undertook the business of manufacturing, assembly and distribution of grain storage silos, field bins and components. The defendant had workplaces at Moree, Cowra, West Wyalong and Gilgandra in New South Wales, at Pittsworth and Toowoomba in Queensland and Bendigo in Victoria. It had approximately 30 employees in New South Wales. The workplaces at Moree, West Wyalong and the site included the manufacture, assembly and distribution of grain storage silos, field bins and components. 7The defendant employed Mr Walsh as a casual tank maker ("tanker") from 14 April 2008. Mr Walsh's duties involved constructing silos at the defendant's site at 8- 10 Pines Drive, Gilgandra . Mr Walsh did not have any special qualifications to perform the tasks involved with the construction of the silos prior to commencing employment with the defendant. 8Mr James O'Connor played an active role in the conduct of the corporation. He was in control of the occupational health and safety systems, was responsible for administration, production and finance, conducted visits to the site between three to five times a year and was in daily contact with the branch supervisor, Mr Clive Lummis. Mr Lummis was responsible for production, safety and delivery of goods through the branch. Mr Lummis had attended a one-day session on Managing Occupational Health and Safety and a training session on 4 October 2005 on Rail Fall Arrest Installation to obtain a Fall Arrest Installation Licence, which expired on 4 October 2006. Mr Lummis was a qualified automotive engineer by trade and had spent 30 years running a workshop. 9Mr Paul Smith commenced employment as a tanker in or about 2006. Mr Smith's duties involved constructing silos at the site. Mr Raymond Harland commenced employment as a tanker in September 2008. Neither Mr Smith nor Mr Harland had any special qualifications to perform the tasks involved with the construction of the silos prior to commencing employment with the defendant. 10The Statement described the incident in which Mr Walsh fell in the following terms: On 6 November 2008, Mr Walsh, in the course of his employment with MPH, fell approximately 7 meters (sic) from the roof of a silo to the ground at the site and sustained various injuries. On 6 November 2008, Mr Walsh and Mr Smith were in the tanking shed on the Site completing the assembling of a silo. The specific task which had to be undertaken was the removal of what is known as the 'bell' from the very top of the silo. In order to remove the bell a Tanker needed to access the roof of the silo. Usually, as shall be later set out, ladders are attached to the side and roof of a silo whilst it is being built. However, no roof ladders were available to access the roof on the particular silo from which the bell was to be removed on 6 November 2008. Mr Walsh was instead lifted onto the roof of the silo by a gantry/monorail crane. The relevant silo did not have a ladder on its roof. Mr Walsh put on a harness with a D-ring and Mr Smith attached the D-ring to a crane hook ('snap hook, hook'). The crane hook was attached to the gantry/monorail crane. Mr Smith operated the gantry/monorail crane by remote control. Mr Walsh was lifted from the ground by the gantry/monorail crane onto the roof of the silo. When Mr Walsh was on the roof of the silo, Mr Smith created a bit of slack in the chain which formed part of the gantry/monorail crane. Mr Walsh was able to move about the roof of the silo. Mr Walsh sprung the lid of the silo roof and removed the lifting bell. Mr Walsh eased over to the edge of the silo ready to be lowered to the ground. When Mr Walsh left the edge of the silo he fell to the ground. The crane hook had disconnected from the harness. Mr Walsh heard a 'kachink' noise 'like a metal noise' just as he left the edge of the silo. When Mr Walsh was on the edge of the silo roof Mr Smith could not see the connection between the crane hook and the D-ring. The vertical distance from the ground to the roof of the silo was approximately 7 metres. Mr Smith, Mr Lummis and Mr Harland attended to Mr Walsh. The NSW Ambulance Service and NSW Police arrived and Mr Walsh was transported to Gilgandra Hospital, the Dubbo Base Hospital then transferred to the Royal North Shore Hospital in Sydney. The harness worn by Mr Walsh was cut by ambulance officers in the process of treating him. As a result of the incident, Mr Walsh sustained the following injuries: laceration on left shin, front tooth knocked out, T1 Vertebra fracture, fractured left wrist, compound dislocation of left elbow, fracture/dislocation of right hip and some bone chipping in the socket. Mr Walsh also suffered psychological injury. Mr Walsh had surgery on his left wrist on 15 November 2008 and was confined in Hospital for a total of approximately nine days. Mr Walsh commenced on a Return to Work Program on 12 June 2009 for four hours per day, three days per week. 11The Agreed Statement described the method by which a silo is fabricated and then proceeded to describe the system whereby a person was required to access the roof of the silo: Once the silo has been fully assembled, the system of work was a Tanker would put on a harness to access the roof of the silo. The harness would be secured to a karabiner, which was clipped onto a fall arrest system consisting of an anchorage, lanyard and inertia reel. The Tanker would then ascend the side and roof ladders and release and remove the bell, with the assistance of another employee operating the gantry/monorail crane. The Tanker would then set the spring on the roof lid and then descend the roof and side ladders. Once on the ground, the Tanker would disconnect from the fall arrest system and remove the harness. The procedure for assembling the silos was not documented. However, all the employees who were interviewed provided a consistent account of the assembly process described above. MPH [the defendant] conducted pre-employment inductions, which involved new employees being given a visual site inspection, and being issued with an Employee Induction Book, which they were required to sign. The Employee Induction Booklet covered a variety of topics, including safety meetings, first aid and incident reporting, drug and alcohol policy, vehicles, manual handling, PPE, training and non-compliance notices. Mr Walsh stated that he did not sign the Employee Induction Booklet or receive the induction when he commenced employment with MPH. However, Mr Lummis signed Mr Walsh's induction checklist. Mr Lummis says he read the employee induction booklet to Mr Walsh, in particular the safety part and Mr Walsh then took the book home to read and to ask questions later. MPH had an Occupational Health and Safety Policy ( OH&S Policy ). The OH&S Policy is referred to in the Employee Induction Book. New employees were 'buddied' up with an experienced employee for on-the job training under overall supervision by the Site Supervisor. The Site Supervisor or the work buddy evaluated the competence of new employees, including Mr Walsh, by watching the new employee operate numerous assembly processes and operate plant or equipment such as the ring roller, 'spider' lifting attachment, bell and gantry/monorail cranes. New employees would also be given instructions in the use of a harness and the fall arrest system. Once a new employee could demonstrate they could correctly use the plant or equipment, they were considered as competent. There were no documents to verify this training process. However, all the employees who were interviewed provided a consistent account of the training process. MPH did not have a system for formal training of employees. 12The system described above was not employed on the day of the incident. This was explained in the Agreed Facts: A few days prior to the incident there was a shortage of roof ladders available at the Site. When roof ladders were available they were delivered from MPH's Toowoomba site to other MPH sites including the Site. As such, on the 31 October 2008, a meeting was conducted at the Site and attended by Mr Walsh, Mr Smith, Mr Harland, Mr Lummis and one other employee to discuss the method of accessing the roof of the silo (without roof ladders). At this meeting, it was decided that they would adopt a different method to access the roof of the silo. Mr Lummis was in charge of the employees and the Site and made a note of the alteration in procedure in his diary. The different method of accessing the roof of the silo involved an employee putting on a harness and then, with the assistance of another employee, being attached by the D-ring on the back of the harness to a crane hook attached to a gantry/monorail crane. The other employee then operated the remote control of the gantry crane so that the attached employee was raised into the air and pulled over and onto the roof of the silo. The bell of the silo would be released and removed and the spring set on the lid. The procedure was then reversed so that the employee was lowered from the top of the silo to the ground. The different work method had been used on three to four occasions between 31 October 2008 and the day of the incident. The first time that Mr Walsh accessed the silo using this method was on the day before the incident. Mr Smith had come over to Mr Walsh and a workmate and said that one of them had to go up onto the roof as Mr Lummis had told Mr Smith that this had to be done. This system of work did not involve reference to the hierarchy of controls in Part (1) of Clause 56 (Prevention of Falls from Heights - particular risk control measures) of the Occupational Health and Safety Regulation 2001 (NSW) ( Regulations ) . In addition the system did not comply with Clause 142 of the Regulations which prohibits lifting persons with a crane unless a suitable and adequate personnel box or carrier designed for the purpose is used. Also, there is guidance to industry in: 2550.1 - 1993 Cranes - Safe Use Part 1: General Requirements Section 7.16 Suspension of Persons by Crane. In particular, section 17.16.1 states 'A person shall not ride upon a hook or the sling of a crane or upon any load while the load is being moved'; and AS 2550.1-2002 Cranes, hoists and winches - Safe use Part 1: General requirements Section 6.18 Suspension of Persons by Crane. 13It was agreed that the incident could have been prevented by: (i) Ensuring that Mr Walsh was not lifted, suspended or lowered by a gantry/monorail crane by means of the crane hook connected to the D-ring on the harness worn by Mr Walsh; (ii) Ensuring that Mr Walsh was not lifted in contravention of clause 142(3)(d) of the Regulations ; (iii) Ensuring that Mr Walsh only performed work at heights in compliance with clause 56 of the Regulations ; and (iv) Rescheduling work until ladders could be installed to the silo. 14There was further agreement as to the defendant's failure to ensure safety: (i) MPH [the defendant] failed to prevent employees from changing the existent safe work system for constructing silos. (ii) MPH failed to inform and instruct employees that they were not to change the existent safe work system for constructing silos. (iii) MPH allowed the unsafe lifting method used by Mr Walsh to be developed by informal consultation with employees not qualified to make these decisions. (iv) MPH failed to retain a person qualified and experienced in relation to lifting techniques and lifting equipment to develop a safe work method before changing the existent safe work system for accessing the top of the silos. (v) MPH failed to ensure that employees were properly trained in and understood height safety issues and issues associated with using plant to lift people so that employees would not adopt a system of work whereby Mr Walsh was lifted by a gantry/monorail crane by means of a crane hook connected to a D-ring on a harness worn by Mr Walsh. (vi) MPH failed to provide Mr Walsh with a supervisor who was suitably qualified to: (a) manage occupational health and safety; (b) manage issues in relation to working at height; and (c) manage issues in relation to use of plant to lift workers. 15Finally, the Agreed Statement described the system of work after the incident: Since the incident, the system of work for the construction of silos (before the change shortly prior to the incident due to the absence of the roof ladders) remains the same as MPH [the defendant] believes it is a safe system. However, MPH developed and implemented it as a Safe Working Procedure and used it as a training tool. Immediately after the accident MPH directed that the system of work used on the date of the incident would not be utilised again. MPH continued to conduct pre-employment inductions. The Employee Induction Book was updated to make it site specific for the Site and renamed "Safety Induction". The Induction was a computer-based presentation that incorporated a question and answer section. A Safe Operating Procedures section was included in the safety induction. Daily Toolbox Talks were conducted and records of those meetings were maintained. The OH&S Policy was updated, dated and signed and distributed to all branches to be placed in all offices and employee lunch rooms in September 2009 for implementation by branch managers/supervisors. Mr Lummis was responsible for the presentation of training on the Safe Operating Procedures. In addition all new employees were trained under the system using a Work Buddy and assessed for competence by the Work Buddy and the Branch Supervisor. All lifting devices (lifting bells and spider etc), overhead gantry cranes, snap hooks, chains and associated equipment were certified by a competent person. MPH made changes to training. In December 2008, MPH engaged an external consultant, Gary Arch as an OHS Advisory, Training and Assessment. In March 2009, training on Safe Working at Heights, Manual Handling, Construction Induction, OHS Policies and Procedures and Confined Spaces was conducted at a venue in Gilgandra and attended by MPH employees from West Wyalong, Cowra and the Site. Training records were kept. MPH provided WorkCover with a copy of a Safety Assessment Report which was a self- appraisal of its current performance in the area of Occupational, Health and Safety. The report indicated an improvement in performance between 31 August 2009 and 30 September 2009 and highlighted that an OHS Management System was being drafted for completion by the end of October 2009; formal consultative processes needed to be developed; regular maintenance records needed to be kept and job safety analyses need to be provided for high risk tasks leading to the development of safe operating procedures. MPH spent $36,796 on safety items and equipment testing, of which $23,027 was spent at the Site during the period May to September 2009. The expenditure related to equipment testing, structural certification and scissor lifts. MPH spent $6,677 on employee training programs at the Site during the same period. MPH provided a Letter of Commitment dated 16 October 2009. The letter was an undertaking to comply with AS4801 Occupational Health & Safety Management Systems by 30 September 2010. The letter also referred to memos issued to branch managers identifying incidents and requiring consultation with employees about incidents. Following the incident, the following Notices were issued upon MPH: 7 November 2009 - Prohibition Notice No. 152994 to cease the system of work that had been used at the time of the incident; 4 December 2008 - Improvement Notice No. 7-171763 for the development of a Safe Work Method Statement for working at heights; 6 November 2009 - Improvement Notice No. 7-192609 to develop, implement and maintain a safe system of work for working at heights in relation to the fall-arrest system and devices to ensure compliance with AS/NZS 1891.4:2000 . MPH has complied with all of the notices listed at [the preceding paragraph]. Prosecutor's evidence 16In addition to the Agreed Statement of Facts, the prosecutor tendered the following material: (1) Prior conviction record showing no prior convictions. (2) Factual Inspection Report of Inspector Keven Pile dated 26 November 2008. (3) Photographs taken by Inspector Pile on 7 November 2008. (4) Silo design diagrams and specifications dated 17 January 2007. (5) 17 colour photographs taken by Sergeant Kane Norris, NSW Police Force, on 6 November 2008. (6) Copies of black and white photographs of safety harness. (7) Four photocopied photos from Craig Hunter, Senior Workplace Health and Safety Inspector, Queensland, showing the safe working procedure for the construction of the silo, which involves a harness being attached to an inertia reel and the use of side-mounted ladders on the silo. (8) Extract Australian Standard AS2550.1 - 1993. Cranes - Safe use. Part 1: General requirements. (9) Extract Australian Standard AS2550.1 - 2002. Cranes, hoists and winches - Safe use. Part 1: General requirements. (10) Australian Standard AS2550.1 - 2002. Cranes, hoists and winches - Safe use. Part 1: General requirements. (11) Extract Australian Standard AS1418.1 - 2002. Cranes, hoists and winches - Safe use. Part 1: General requirements. (12) Extract Australian/New Zealand Standard AS/NZ 1891.1:2007. Industrial fall arrest systems and devices. Part 1 Harnesses and ancillary equipment. (13) Extract Australian/New Zealand Standard AS/NZ 1891.1:2000. Industrial fall arrest systems and devices. Part 4: Selection, use and maintenance. (14) Extract Australian/New Zealand Standard AS/NZ 1891.1:2009. Industrial fall arrest systems and devices. Part 4: Selection, use and maintenance. Defendant's evidence 17The defendant's evidence consisted of an affidavit of James Mitchell O'Connor. Mr O'Connor was not required for cross-examination. His evidence may be summarised as follows: 1. A description of the defendant and its business. The defendant is the Corporate Trustee of the Jim O'Connor Family Trust and the defendant's sole trading function relates to the management, as trustee, of the Trust's investments. At present, the defendant has no employees. 2. Sale of the business. On 25 August 2010, the defendant sold the business rights and assets associated with the manufacture and distribution of the Sherwell range of silos and field bins. The defendant also sold its chaser bin manufacturing business. The defendant ceased to be an employer on 25 November 2010. 3. The process involved in constructing silo tanks. 4. Mr O'Connor's understanding of what occurred on the day of the incident. In that respect, Mr O'Connor deposed: After the incident I was informed by Mr Lummis that a meeting had taken place at the site on 31 October 2008 between Mr Lummis and the tankers working at the site, Mr Walsh, Paul Smith ("Mr Smith"), Fred Harland and another employee, I knew as "Liam". I was also informed by Mr Lummis that, at the meeting on 31 October 2008, it was decided the tankers would access the silo roof to remove the lifting bell by putting on a harness which would be attached to the hook of the one tonne overhead hoist crane until stocks of roof ladders were received ("the alternative method"). ... I understand Mr Walsh was injured when the alternative method of work was being used. At the time of the incident I understand Mr Walsh put on a harness which had a D ring attached to the back of it. The D ring was attached to the crane hook which was attached to the gantry overhead crane. I understand Mr Smith, who was also employed as a tanker by the defendant, operated the controls of the crane. He lifted Mr Walsh into the air and then pulled him over to the roof of the silo. After completing his work on the roof of the silo, when Mr Walsh started to descend, it appears the D ring attached to his harness became disconnected from the crane hook as a result of which he fell approximately seven metres to the ground below. I became aware of the incident when I was contacted by Peter Lummis after it had occurred. At that time Mr Lummis told me Mr Walsh had been injured following a fall from the roof of a completed silo while removing the lifting bell from the silo centre fill and was being transported by ambulance to Dubbo General Hospital. I was not aware of the decision taken on 31 October 2008 to adopt the alternative method of accessing silo roofs had been made until after the incident. If I had been aware that such a decision was being contemplated, I would have counselled the Branch Manager and the relevant staff and directed the Branch Manager and the relevant staff to comply with the defendant's safe work method for assembling silos, including the defendant's safe work method for obtaining access to the roofs of silos under construction. 5. Safety systems in place prior to the incident. In that respect Mr O'Connor deposed, inter alia: The method of work described above was examined in operation at the Toowoomba site on 11 November 2002 by Craig Hunter, Senior Workplace Health and Safety Inspector (Electrical), South-West Queensland, Workplace Health and Safety, Queensland Department of Industrial Relations. The defendant had a documented workplace health and safety policy in place at the time of the incident. The defendant had a formal induction policy and process, together with an employee induction book, in place at the time of the incident. Part of that induction book related to slips, trips and falls. Prior to and at the time of the incident, tankers were trained at the site using a buddy system, under the supervision of Mr Lummis. Prior to the incident I regularly observed the operation of the buddy system when visiting the site. Generally, I was satisfied that both tankers and other staff were being properly instructed in safe work methods through the buddy system. In 2005 Mr Lummis attended seminars on "OHS: How to Do It" and on the fall arrest system installation. A two day meeting, which included all branch managers and, to the best of my recollection, two of the directors of MPH, was held in Brisbane in January 2007. Safety was a major topic at that meeting. Mr Lummis attended that meeting. The meeting concluded with a half day workshop on safe operating procedures. In the course of the meeting, we went through the process involved in identifying the risks and the hazards associated with each task under assessment and outlined measures that could be taken to mitigate or eliminate each risk. All the branch managers were required to write SOPs for a variety of jobs, including tank assembly. There was a trained first aid officer at Gilgandra. Prior to the incident, in about mid 2006, the defendant retained the services of a management consultant to assist in the formalisation of the defendant's directorial and management processes. Commencing in about September 2006, the directors of the defendant held formal, documented, monthly Board Meetings that included documented reports relating to a range of management and business issues, including safety. As I was the director responsible for occupational health and safety, I was responsible to report and I reported to the Board at these meetings. In addition, prior to December 2007 when my brother Michael O'Connor moved to Melbourne, Michael and I worked in adjacent offices in the defendant's head office in Brisbane. As Michael and I were the directors primarily responsible for business, we conferred, informally, on an almost daily basis. After Michael transferred to Melbourne, Michael and I reverted to running the company via informal meetings which we held on the telephone, via the internet and during trips to Melbourne. We maintained almost daily contact but the Board did not hold formal meetings. I was in regular, often daily, contact with Mr Lummis during which I would discuss with him the operations of the branch including production, staffing, safety and financial issues. I generally visited the site 4 to 5 times per year. When I visited the site, I always spoke with Mr Lummis and other employees, generally, about a range of issues including safety concerns. Often, meetings were held at which all staff on site attended. Those meetings focused on issues such as the use of PPE, any safety incident which may have occurred, and provided an opportunity for all staff to raise any safety or other issues. During my visits, as I walked through the site, I checked whether staff were using PPE and observed the tank building operations to ensure work was being carried out safely. During these walk-throughs, I saw that the fall arrest system was being used when tankers were removing the lifting bell from silos. My brother, Michael O'Connor, generally visited the Gilgandra branch two to three times a year, sometimes with me. 6. Steps taken following the incident. In that respect Mr O'Connor deposed, inter alia: All staff were immediately directed that work on silo roofs was not to take place unless roof ladders were available and the fall arrest system was always to be used when accessing silo roofs. In May 2009 Gary Arch, a safety consultant who had done some work for the defendant in Victoria in December 2008, was retained to review the defendant's safety management system. In January 2009 a new safety induction was developed which included a question and answer response. A series of written SOPs were developed and introduced. Those SOPs included a written procedure for removing the lifting bell on completion of a silo. In March 2009 MPH staff working in NSW underwent accredited safety training in working at heights, manual handling and construction. Select staff also underwent training in confined spaces. A system of monthly training sessions for employees addressing SOPs as they were developed was introduced. Daily tool box talks were introduced to address work safety and hazards. Minutes were kept of those meetings. Structural testing of lifting structures was carried out. A new Occupational Health & Safety Policy was adopted on 8 September 2009 as part of that process. The defendant made a commitment to comply with AS 4801 Occupational Health & Safety Management Systems by 30 September 2010. Gary Arch was retained to assist MPH to achieve that commitment. A health and safety improvement plan was adopted and was being implemented as part of that process. The defendant was proceeding with the implementation of AS 4801 when an offer to buy its business was made and accepted in May 2010. 7. Other matters. Mr O'Connor deposed, inter alia: The Board of Directors of the defendant have authorised me to acknowledge the defendant's breach and to acknowledge the defendant's breach of its duty to its employees at the site who were involved in the construction of silos as tankers and, in particular, Mr Walsh. The Board of Directors profoundly regrets the breach by the defendant of its duty and profoundly regrets the injuries sustained by Mr Walsh which flowed from that breach. Following the accident I visited Mr Walsh in hospital on one occasion . I also maintained contact with Mr Walsh's wife so as to track his progress and to offer further assistance and support to Mr Walsh and his family. Mr Walsh returned to work on a return to work program from 12 June 2009. However, Mr Walsh continued to have difficulties in the workplace which resulted in further periods of time during which Mr Walsh was unfit for work. As at 25 August 2010, the date on which the defendant sold the business, Mr Walsh was still employed by the defendant and his employment was transferred, as part of the sale of the business, to the purchaser, the Ahrens Group. At the time of the transfer of his employment, the Ahrens Group was aware of the incident and of Mr Walsh's injuries and state of health and, as the transfer of his employment was the subject of specific discussion I had with representatives of the purchaser, I can state that the Ahrens Group indicated an intention to taken (sic) on Mr Walsh's employment and his employment was transferred to the Ahrens Group. The defendant co-operated with WorkCover in relation to its investigation of the incident. Verdict 18Having regard to the charge in this matter, the particulars of the offence, the agreed statement of facts and the evidence tendered in the proceedings, I accept the plea of guilty by the defendant and will enter a verdict accordingly. Consideration 19The risk identified in the charge and to which the defendant pleaded guilty was that of: 1. Falling from the roof of the silo to the ground. 2. Falling from height whilst being lifted, suspended or lowered by the gantry/monorail crane. 3. Striking, colliding or being caught with or on pieces of plant, including the silo, obstructions on the silo, the roof protrusion of the silo, the hook of the gantry/monorail crane and a silo ring on the ground near the silo. 20By its acts or omissions the defendant failed in two principal ways to obviate the risk. First, it failed to ensure that the system of work followed by employees of constructing silos was safe and without risk to health. This system failure manifested itself in four ways: a failure to ensure that Mr Walsh was not lifted, suspended or lowered by a gantry/monorail crane by means of a crane hook connected to a D-ring; a failure to ensure that Mr Walsh was not lifted in contravention of cl 142(3)(d) of the Occupational Health and Safety Regulation 2001; a failure to ensure that Mr Walsh only performed work at heights in compliance with cl 56 of the Occupational Health and Safety Regulation; and a failure to reschedule work until ladders could be installed to the silo. 21Clause 142(3)(d) provides: (3) An employer must ensure that, in relation to plant designed to lift or move people, equipment or materials: ... (d) persons are not lifted or suspended by plant or an attachment to plant (other than plant specifically designed for lifting or suspending persons) unless: (i) use of another method of lifting or suspending is not reasonably practicable, and (ii) a suitable and adequate personnel box or carrier, designed for the purpose, is used and is securely attached to the plant, and (iii) means are provided by which persons being lifted or suspended can have safe egress from the personnel box, carrier or plant in the event of a failure in the normal operation of the plant, and (iv) the plant is suitably stabilised, and can be maintained by the operator in that state, at all times during which the personnel box or carrier is in use, and (v) a suitable fall arrest device is provided to and worn by all persons who are suspended in a personnel box or carrier unless the box or carrier is fully enclosed, and (vi) in the case of a crane, the crane has drive-up and drive-down controls on both the hoisting and luffing motions and these controls are used by the operator in the lifting and suspending operations. 22Clause 56 of the Regulation provides: 56 Prevention of falls from heights-particular risk control measures (1) An employer must ensure that risks associated with falls from a height are controlled by use of the following measures: (a) provision and maintenance of: (i) a stable and securely fenced work platform (such as scaffolding or other form of portable work platform), or (ii) if compliance with subparagraph (i) is not reasonably practicable-secure perimeter screens, fencing, handrails or other forms of physical barriers that are capable of preventing the fall of a person, or (iii) if compliance with subparagraph (ii) is not reasonably practicable-other forms of physical restraints that are capable of arresting the fall of a person from a height of more than 2 metres, (b) provision of a safe means of movement between different levels at the place of work. (2) If a fall arrest device is provided for use by persons at work, the employer must ensure that: (a) all anchorage points for the device are inspected by a competent person before their first use and then on a regular basis so they are capable of supporting the design loads, and (b) if the load-bearing capacity of an anchorage point is impaired, the anchorage is immediately made inoperable so as to prevent its use, and (c) any harness, safety line or other component of the device that shows wear or weakness to the extent it may cause the device to fail is not used, and (d) all persons using the device have received training in the selection, assembly and use of the system, and (e) adequate provision is made for the rescue of a person whose fall is arrested by a fall arrest device. 23Secondly, the defendant failed to ensure such safe system of work by: failing to inform and instruct employees they were not to change the existent safe system of work; allowing work methods such as the unsafe lifting method used by Mr Walsh to be developed by informal consultation with employees not qualified to make such decisions; failing to retain a person qualified and experienced in relation to lifting techniques and lifting equipment to develop a safe work method before changing the existing safe work system for accessing the top of the silos; failing to ensure that employees were properly trained in and understood height safety issues; and failing to provide Mr Walsh with a supervisor who was suitably qualified to manage occupational health and safety, manage issues in relation to working at heights and manage issues in relation to use of plant to lift workers. 24It was an integral part of the defendant's operations that an employee would have to work at height in the fabrication of silos; there was no avoiding it. A worker was required to work on top of the silo to remove the lifting bell and perform other operations. It follows that it was imperative the defendant had a safe method of working at height. 25Because of the relative isolation of the work site, the defendant relied heavily on the local manager, Mr Lummis, to ensure safety. Whilst Mr Lummis may have been an experienced manager he was not suitably qualified to manage occupational health and safety, manage issues in relation to working at heights or manage issues in relation to use of plant to lift workers. Mr Lummis' training on Rail Fall Arrest Installation may have given him some insight into what was required in terms of safety, but it was not training directly relevant to the work undertaken at the Gilgandra site and it meant he was ill-equipped to deal with a situation involving a deviation from the safe system of work that applied at the site. Mr Walsh, the injured employee, was also not a person qualified and experienced in relation to lifting techniques and lifting equipment. In fact, no one at the site was suitably qualified or experienced in this regard. 26Consequently, and in the absence of any training or instruction otherwise, in circumstances where the usual and safe method was not available for working at height because of the absence of ladders, workers devised and adopted an unsafe lifting method that placed Mr Walsh at risk. The alternative method of obtaining access to the roof of silos under construction: [I]nvolved an employee putting on a harness and then, with the assistance of another employee, being attached by the D-ring on the back of the harness to a crane hook attached to a gantry/monorail crane. The other employee then operated the remote control of the gantry crane so that the attached employee was raised into the air and pulled over and onto the roof of the silo. ... The procedure was then reversed so the employee was lowered from the top of the silo to the ground. 27That this method was unsafe is obvious from the fact that it failed to prevent Mr Walsh falling seven metres, but it was known to be unsafe. The safety standard relating to industrial fall-arrest systems and devices warned of the potential of inadvertent release when using a karabiner on a snaphook and that is just what occurred. A person familiar with that standard would have been aware of the danger, but it appears no such person existed at the Gilgandra site. 28It may have been that if ladders were available the incident would not have occurred. Mr O'Connor said in his evidence he was not aware that ladders were not available. But the defendant left the responsibility for the operation at Gilgandra to the local manager and it cannot escape liability because senior personnel with the company were not aware of the unavailability of ladders. 29Another significant factor to be taken into account when assessing the level of culpability of the defendant is the degree of foreseeability of the risk to safety. The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. In the present case the risk of falling from height was not only foreseeable but was known to the defendant. 30The occurrence of death or serious injury may manifest the degree of seriousness of the relevant risk. In this case, the risk that manifested itself resulted in serious injuries to Mr Walsh and in my opinion could easily have resulted in his death. Section 21A(2)(ib) of the Crimes (Sentencing Procedure) Act 1999 provides that the fact that an offence involved a grave risk of death to another person or persons is an aggravating factor to be taken into account in determining the appropriate sentence for an offence. 31An additional factor in assessing the gravity of an offence is whether there was available at the time of an incident simple and straightforward remedial measures to avoid or minimise the relevant risk to safety. In the present case such measures are readily apparent as evidenced by the remedial steps taken by the defendant following the incident. As the prosecutor submitted the steps taken by the defendant following the incident in promulgating clear directions to its employees, developing a new safety induction, introducing written safe operating procedures and providing further training were all readily available prior to the incident and self-evidently should have been in place. 32In considering the objective seriousness of the offence, regard should be had to any factors mitigating that seriousness. In that regard, the defendant was not a company that ignored its obligations to occupational health and safety. As the defendant submitted, this was not a case that can be properly characterised as involving a systematic failure on the part of the defendant to address its responsibilities under the Act: the "climb whilst attached" work method instituted before the incident was and remained an appropriate work method. It was one which, prior to the incident had attracted the support of a work safety inspector from Queensland Department of Labour and Industry as a work safety innovation; the defendant had in place a documented workplace health and safety policy together with a formal workplace induction policy and process; the Branch Manager involved in the subject incident, Mr Lummis, was an automotive engineer with 30 years experience working in the farm machine industry; Mr Lummis had been provided with some training - although, it was conceded on behalf of the defendant that the subject training was, in light of the subject incident, inadequate; the defendant had in place a formal, documented workplace induction process; the defendant had in place an on the job training in relation to safe work practices , including "the climb whilst attached" method, which utilised the "buddy system" to provide both on the job training and supervision of the new employees by trained, experienced employees until new employees were deemed competent; Jim O'Connor was in regular, often daily, contact with Peter Lummis and other branch managers; and both Jim O'Connor and Michael O'Connor, as directors and senior managers, made regular branch visits, including the conduct of "site walk throughs" in which he observed work practices and held safety discussions with employees. 33Further, whilst there may have been an absence of formality in respect of training systems and certain documentation, it is apparent that employees were familiar with the system of work and the training system and had received training. Moreover, there is no authority for the proposition that an informal work method, which is otherwise sufficient to ensure health and safety, is rendered unsafe merely because it is unwritten or that training is inadequate because the training is provided informally on the job, or by way of the "buddy system" (see Genner Constructions Pty Ltd v WorkCover Authority of New South Wales (Inspector Guillarte) [2001] NSWIRComm 267; (2001) 110 IR 57 at [56]-[57]). The central flaw in the defendant's system, however, was that it permitted a deviation that proved to be unsafe. 34The prosecutor submitted that in light of the Full Bench decision in Capral Aluminium Limited v WorkCover Authority of New South Wales [2000] NSWIRComm 71; (2000) 49 NSWLR 610 there should be a significant component of penalty in the present case for general deterrence. The Court agrees. Falls from height is not an uncommon hazard and there have been many prosecutions in this jurisdiction involving falls. An appropriate level of penalty that has regard to the need for general deterrence will compel attention to the risk of falls: see Fisher v Samaras Industries Pty Limited (1996) 82 IR 384 at 388. 35As to the question of specific deterrence, it would appear that the defendant currently has no employees and is not involved in any manufacture of silos or tanks having divested itself of the business. In Capral the Court stated at [77]: [77] In sentencing, a court may disregard the element of specific deterrence if satisfied that the risk of re-offending is low or non-existent. The court may form such a view as a result of the rehabilitation of the offender ... or because the offender will not have the opportunity to commit a similar offence in the future ... However, we think it unlikely that the weight to be attached to specific deterrence could be reduced to zero in case of offences under the Act. At least where the offender continues to be an employer, risks to the safety or its employees or contractors may exist or be possible. Breaches of the duties imposed by the Act may occur both by commission and omission. Employers are required to maintain constant vigilance and take all practicable precautions to ensure safety in the workplace. ... 36The defendant submitted: The defendant immediately upon learning of the incident halted the "alternative work practice" that had been adopted at the site and commenced a process of investigation and review which involved the introduction of widespread changes to its occupational health and safety systems. As part of the process, the defendant utilised the services of external consultants to drive formalisation of its occupational health and safety practices, with acceptance by the directors of the company that change had to start at the top. This change is, arguably, best exemplified by the decision of the Board to commit to achieving AS4801 accreditation by 30 September 2010. Further, and in any event, as a consequence of the complete restructuring of the defendant's corporate structure and the nature of its business, there is no prospect of the defendant re-offending in the subject manner, or at all. [i.e. the company has sold the subject business, ceased to be an employer and now, operates solely as an investment manager for a family trust]. 37There is effectively no prospect of the defendant offending against the Act in the future. Specific deterrence may be disregarded. 38Finally, in relation to objective considerations, regard is to be had to the maximum penalty for the offence, which is $550,000. 39It may be concluded, and the defendant conceded, that the breach was objectively serious. 40There are a number of subjective considerations. First, the prosecutor accepted there had been an early plea of guilty and I also accept that to have been the case. I intend to discount the penalty by 25 per cent. 41Secondly, the defendant has no prior convictions and I accept the good character of the defendant. Thirdly, the defendant co-operated fully with the WorkCover Authority throughout its investigation. Fourthly, I consider the defendant has demonstrated remorse and contrition by its early plea and by its post-incident conduct and has accepted responsibility for its role in the contravention of the Act. I note the assistance provided by the defendant to Mr Walsh. 42Having regard to all of the subjective and objective considerations in this matter I have determined an appropriate penalty to be $100,000. Orders 43The Court makes the following orders: (1) The defendant is convicted of the offence. (2) The defendant is fined the sum of $100,000 with a moiety to the prosecutor. (3) The defendant shall pay the prosecutor's costs as agreed or as assessed. Failing agreement, costs may be referred to the Registrar for assessment. ********** 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: 17 October 2011